In an interview with Bloomberg’s Kathleen Hays and Vonnie Quinn, Federal Reserve Bank of San Francisco/CA President Dr. John Williams said the Fed is getting closer to normalization, needs to weigh pros/cons for right timing on lift-off. Dr. Williams said June would be a good, responsible starting point to consider lift-off.

Fed Pres. Williams: Fed Closer To Normalization; June Good Time To Consider Lift-off

Fed President Dr. John Williams told the Bloomberg Radio hosts:

  • ‘Patient’ was natural progression for Fed.
  • ‘Patient’ means no move in next couple meetings.
  • Monetary policy is data dependent.
  • Job growth stronger than he expected.
  • Low inflation is negative.
  • Inflation will stay low for some time.
  • Monetary policy acts with a lag.
  • Market views of lift-off timing relatively reasonable.
  • Inflation expectations well anchored at 2%.
  • Wage growth to pick up as economy gets stronger.
  • Fed has plenty of tools if inflation disappoints.
  • Fed could delay lift-off if inflation stays too low.
  • Increase in supply of oil big factor in price drop.
  • Oil supply shock is positive for world economy.
  • Drop in oil process is ‘huge windfall’ for consumers.
  • Fall in oil prices will boost consumer spending.
  • Oil prices don’t affect underlying inflation.
  • Ricks to U.S. economy are all from abroad.
  • U.S. economy in a ‘very good place’ domestically.
  • Sees GDP Growing 2.5% to 3% next year.
  • Sees unemployment at 5.25% at end of next year.
  • Drop is oil prices very big plus for U.S. next year.
  • U.S. can grow above trend with weak global growth.
  • Global conditions are part of Fed’s outlook.
  • Housing is still the big question mark for U.S.
  • Sees some signs wage growth picking up.
  • Expects wage growth to pick up in coming quarters.
  • Looks forward to day when monetary policy is ‘boring’.
  • Core inflation will be below 2% in 2015.
  • Core inflation will likely be below 2% at lift-off.