- John Williams, San Francisco Federal Reserve President
San Francisco Federal Reserve President John Williams believes that the US central bank should hike interest rates from near-zero twice this year if economic data meet expectations, highlighting that a delay of a hike for too long poses risks to the world's number one economy. However, Williams and other members of the Fed's board continue to be in a wait-and-see mode, stressing that a rate decision is dependent on economic data including jobs and inflation. Fed policy makers have for some time projected that inflation that for years has stayed below the Fed's 2% target will climb as unemployment declines and the labour market tightens. Williams reiterated that the economy probably expanded around 1.5% in the first quarter, rather than contracting as government data has indicated. Williams further expected that GDP will grow at about a 2.75% annual rate for the next several quarters before slowing to a more sustainable pace next year. Unemployment will likely slide to 5.2% by the end of the year, and stronger wage growth is already evident. Against that background, inflation is likely to return to 2% by next year, Williams said.
Fed officials ended their policy-setting meeting last week with a decision to keep rates on hold at zero, where they have been since December 2008.
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