Armonk, New York – Speaking the Saturday after the FOMC declined to raise the federal funds rate at its September meeting, John C. Williams, president and CEO of the Federal Reserve Bank of San Francisco, reiterated his view that 2015 remains the appropriate year for a rate hike.
In an address to a symposium on China and U.S. financial systems, the policymaker outlined the arguments on both sides of the “patience versus action” debate, citing economic turmoil overseas and persistently low inflation as the case for patience, and the lags in monetary policy and the safer course of a gradual, longer rise.
“In the past, I have found the arguments for greater patience to clearly outweigh those for raising rates. The labor market was still far from full strength and the risk to the recovery’s momentum was very real. As the economy closed in on full employment, the other side of the ledger started gaining greater weight and the arguments have moved into closer balance.”
“(G)iven the progress we’ve made and continue to make on our goals, I view the next appropriate step as gradually raising interest rates, most likely starting sometime later this year.”
The Federal Reserve Bank of San Francisco (SF Fed) works to advance the nation’s monetary, financial, and payment systems to build a stronger economy for all Americans. As part of the U.S. central bank, the SF Fed serves the Twelfth Federal Reserve District, which covers the nine western states—Alaska, Arizona, California, Hawai’i, Idaho, Nevada, Oregon, Utah, and Washington—plus American Samoa, Guam, and the Commonwealth of the Northern Mariana Islands. By pursuing our two key goals of maximum employment and price stability—known as the Fed’s dual mandate—we work toward supporting an economy that works for everyone.