Fed’s Wil­liams stands by hike out­look

New Straits Times - - Business -

WASH­ING­TON: Fed­eral Re­serve (Fed) Bank of San Fran­cisco pres­i­dent John Wil­liams said his out­look for three or four rate hikes hasn’t shifted, as the labour mar­ket shows signs of ex­pand­ing be­yond its sus­tain­able rate and the econ­omy op­er­at­ing above po­ten­tial.

“I haven’t changed my views on what ap­pro­pri­ate pol­icy was for the re­main­der of the year,” said Wil­liams on Fri­day, re­fer­ring to his com­ments last month that three or four hikes would be re­quired.

On Satur­day, at an event in Cal­i­for­nia, Wil­liams said the econ­omy “was op­er­at­ing above po­ten­tial”.

Fed of­fi­cials left in­ter­est rates un­changed last week, in­di­cat­ing that a dis­ap­point­ing first quar­ter wouldn’t stop them from rais­ing rates twice more this year fol­low­ing a hike in March.

Pol­i­cy­mak­ers de­scribed as “tran­si­tory” a slow­down in firstquar­ter growth, while em­pha­sis­ing that in­fla­tion was run­ning close to their two per cent goal and the labour mar­ket con­tin­ued to strengthen.

Labour Depart­ment data on Fri­day backed the views, show­ing em­ploy­ers cre­ated a greater-thanex­pected 211,000 jobs last month as un­em­ploy­ment fell to 4.4 per cent, the low­est since 2007.

An­nual wage gains, though, slowed a touch to 2.5 per cent.

“It’s nice to see fur­ther con­fir­ma­tion that first quar­ter gross do­mes­tic prod­uct num­ber was an aber­ra­tion,” said Wil­liams. Bloomberg


The US labour mar­ket is show­ing signs of ex­pand­ing be­yond its sus­tain­able rate.

Newspapers in English

Newspapers from Malaysia

© PressReader. All rights reserved.