U.S. Markets

Fed's Williams says price-level targeting has benefits

FILE PHOTO - John C. Williams, President and CEO of the Federal Reserve Bank of San Francisco, speaks at the Milken Institute Global Conference in Beverly Hills, California, U.S. on May 2, 2016. REUTERS/Lucy Nicholson/File Photo - RC18A9AB9740

WASHINGTON (Reuters) - The U.S. Federal Reserve could better fight a recession by committing to keep interest rates lower for longer to keep average inflation on a steady upward path over the years, San Francisco Fed President John Williams said on Monday.

Williams in the past has spoken favorably of this approach to monetary policy, known as price-level targeting.

“It basically promises extra stimulus,” said Williams, whose comments come as U.S. central bankers have appeared increasingly open to debating changes in how they target economic stability.

Reporting by Jason Lange; Editing by Andrea Ricci