(Reuters) -The independence of the Federal Reserve is "incredibly important" not just for the U.S. economy but also for the global economy because it is what allows the U.S. central bank to control inflation without regard to short-term political consequences, New York Fed President John Williams said on Thursday.

"Where central banks have lost their independence (this) has had horrible consequences in terms of price stability, economic stability," he said at an event at Goethe University in Frankfurt, Germany. "The evidence is pretty very compelling that independent central banks have been able to make tough decisions and unpopular decisions in the short run that pay off in the long run, especially around price stability."