Business
Speaking at a symposium in Singapore, San Francisco Fed chief John Williams said the US Federal Reserve’s approach to interest rate hikes will benefit the US and global economies.
File photo of John Williams, president of the Federal Reserve Bank of San Francisco. (Photo: Reuters)
SINGAPORE: The US Federal Reserve aims to take a “gradual” and “transparent” approach to interest rate hikes, said Federal Reserve Bank of San Francisco’s president and chief executive John Williams on Monday (May 29).
Speaking in his personal capacity on the matter at the 2017 Symposium on Asian Banking and Finance here on Monday, Mr Williams said the Fed’s process would be “widely telegraphed”.
“The last thing we want to do is fuel unnecessary or avoidable volatility or disruption, whether we’re talking about domestic markets or international markets,” said Mr Williams in his keynote speech at the symposium, which is co-hosted by the Monetary Authority of Singapore (MAS) and the San Francisco Fed.
“That’s why we’re taking a gradual approach to normalisation and why we’re being very clear, transparent, and open about how we’re making decisions.”
Ultimately, he said, this type of approach will benefit the US and global economies.
Two more interest rate hikes are expected in 2017 and the Fed is likely to continue on the path of increase for the coming years, Mr Williams added.
Mr Williams said the aim of monetary policy in the country must be “to keep economic expansion on a sound footing that can be sustained for as long as possible”.
He noted that the US economy had recovered from the recession based on data that showed unemployment at 4.4 per cent and inflation on track to reach the Fed’s 2 per cent goal for 2018.
However, with conditions subject to change, he said the Fed cannot rule out adjustments to policy including raising rates at a quicker pace if inflation or unemployment grows faster.
