Fed’s Williams optimistic on outlook; says 2015 still “appropriate” for rate hike
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.”
Federal Reserve Bank of San Francisco
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.