Los Angeles, California – A leading policymaker said today that he’s encouraged by the economic outlook and that he still views a 2015 rate hike as an “appropriate” action. John C. Williams, president and CEO of the Federal Reserve Bank of San Francisco, made the remarks in a speech at UCLA.
Williams explained his view on declining to raise rates at the FOMC’s last meeting, saying, “I considered it a close call, in part reflecting the conflicting signals we’re getting: On the one hand, the U.S. economy continues to strengthen and is closing in on full employment, while on the other, global developments pose downside risks.”
But he was clear that the next two meetings are on the table and that the economy continues to strengthen. “Looking forward, I expect that we’ll reach our maximum employment mandate in the near future and inflation will gradually move back to our 2 percent goal. In that context, it will make sense to gradually move away from the extraordinary stimulus that got us here,” adding, “…given 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.