- John Williams, San Francisco Fed President
As the Fed is moving closely to ensure its dual mandate of stable prices and maximum employment is met, it should raise interest rates in the near future despite strong headwinds from overseas, San Francisco Fed President John Williams said. Responding to the recent string of disappointing US economic readings, investors cut their bets the Fed will hike interest rates this year. On the contrary, Williams argued that the central bank should raise rates to slow down economic growth before it becomes unsustainable. The world's number one economy will probably expand about 2% or 2.25% next year, Williams predicted, fast enough to push the jobless rate "well below" 5% and begin to push inflation back up toward the Fed's 2% target. Yet, the pace of rate increases should be gradual, leaving monetary policy accommodative for coming years.
Forecasts prepared for the September 16-17 Federal Open Market Committee gathering showed that 13 of 17 policy makers saw a rate hike warranted this year. Williams, who is a voter of the Fed's policy-setting panel, declined to specify when he personally would like see the US central bank start normalizing policy. However, Williams refused to rule out October meeting for a rate hike.
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