Fed’s Williams stands by hike outlook
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.