SF Fed’s Williams: Independent Fed Has “Essential Role” to Play in Protecting Stability of the Economic Recovery

February 28, 2017

Says rate increase is “on the table for serious consideration” in March and expresses confidence economy will continue to grow at a healthy pace after potential increases


Indicates economy is close to reaching Fed’s dual mandate goals of maximum employment and price stability

Santa Cruz, California — John C. Williams, president and CEO of the Federal Reserve Bank of San Francisco, offered a strong endorsement of the Federal Reserve System’s independence. Speaking to Santa Cruz business leaders, he maintained that the economy is strong and that an independent Federal Reserve has a critical role to play in protecting the stability of the nation’s recovery from the Great Recession. To maintain the economic expansion, now in its eighth year, Williams also said that a rate increase is “very much on the table for serious consideration” in March, and he expressed confidence that the economy will continue to grow at a healthy pace, should such policy be implemented.

“The aim is to keep the economic expansion on a sound footing that can be sustained for as long as possible. The last thing we want is to undermine the hard-won gains we’ve made since the dark days of the recession,” Williams told members of the Santa Cruz Chamber of Commerce. “I know this has been a tough journey for a lot of people, and many are still struggling.  But putting the economic recovery in perspective, we’ve come a very long way.”

Citing research showing that countries with independent central banks tend to have more stable economies, he detailed the connection between the monetary policy choices at hand and the importance of an independent Fed: “To my mind, this is the single most important feature of the Fed — the ability to act independently of short-term political influence, which allows us to respond to changing circumstances as needed.”

In addition, Williams spoke about his admiration for how the Santa Cruz community came together to rebuild after the 1989 Earthquake. He also discussed current economic conditions in Santa Cruz, explaining that the region is a microcosm of the dichotomy we see throughout the country, with some areas enjoying the benefits of solid job growth, and others struggling to keep up. “I know that if you’re struggling, better doesn’t feel good enough,” he said.

“There are things we can do, and are doing at the Fed to be a part of the solution for struggling communities. I’m particularly proud of my team in San Francisco who’ve established our bank as a leader in Community Development—connecting the various investors, community leaders and other stakeholders in recognition that when communities thrive, it’s good for everyone,” he added.

While discussing the current economic outlook, Williams cited economic data indicating that the economy is in its eighth year of expansion, with inflation is moving toward the Fed’s 2% target and a workforce at full employment.


Matthew Schiffgens
Federal Reserve Bank of San Francisco
(415) 974-3246


The Federal Reserve Bank of San Francisco, with branch offices in Los Angeles, Seattle, Salt Lake City, and Portland, and a cash processing office in Phoenix, provides wholesale banking services to financial institutions throughout the nine western states. As the nation’s central bank, the Federal Reserve System formulates monetary policy, serves as a bank regulator, administers certain consumer protection laws, and is fiscal agent for the U.S. government. Follow us on Twitter at twitter.com/sffed.