SF Fed’s Williams: Sustainable Growth Will Keep the Strong Economy Going as Long as Possible

April 6, 2018

  • Williams says looking ahead, he expects “growth to average around 2.5 percent over this year and next”
  • Says “the economy is on course to be as strong as we have seen in many decades and inflation is moving closer to our target. The challenge for monetary policy is to keep it that way”
  • Says the “right direction for monetary policy” includes “three to four rate increases this year and further gradual rate increases over the next two years”

Santa Rosa, California – Today, John C. Williams, President and CEO of the Federal Reserve Bank of San Francisco, described the current economic outlook and gave his views on monetary policy to a meeting of the World Affairs Council of Sonoma.

Williams discussed growth, employment, and inflation and described the outlook as “very positive.” He said that “the current pace of growth is above trend” and that slow labor force and productivity growth are holding down the trend growth rate. He said: “Growth above trend doesn’t necessarily pose a particular risk at this time. But it’s one of the factors I’m assessing when I’m thinking about how to best support economic growth over the medium term.”

Given that the current pace of growth is above trend, Williams’ view “is that we need to continue on the path of raising interest rates.” Discussing monetary policy strategy Williams said: “Note that the rate increases we have put in place so far have not stalled the economy. In fact, the economy continues to steam ahead. For that reason, I am confident that we can carry on the process of gradually moving interest rates up over the next two years while seeing solid growth and historically low rates of unemployment.”


Kevin Sajdak
Federal Reserve Bank of San Francisco
(415) 314-2948


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.