On Monday, the president of the Federal Reserve Bank of San Francisco John Williams said he expects a gradual increase in interest rates by the US central bank this year, subject to sustainable economic growth, wages and inflation.
Before the US economy is still a lot of obstacles, including a slowdown in the economies of developing countries, a strong dollar and the situation on the real estate market, said Mr. Williams in an interview with reporters after a speech to the American Economic Association annual conference in San Francisco.
As for raising short-term rates, the Federal Reserve Bank President Francisco believes that the number and timing depends on the economic situation in the country. However, he noted that Fed officials hold four rate increases, bringing the overnight rate is approximately 1.35%.
This year, most economists expect further economic growth and strengthen the labor market. Forecasters, including Fed officials, there was a slight rise in inflation. Nevertheless, for more than three years, the rate of inflation is below the target level of 2% of the bank, and is expected to reach it only in 2018.
This year, Mr. Williams is not a voting member of the Federal Committee Operations on the open market, however, last year he supported the Fed's rate hike at the meeting in December.
With regard to the fall in the Chinese market Monday, John Williams said that the current situation did not change his confidence in the US economy, which is characterized by strong domestic demand.
He predicted that the US economy will grow by 2-2.25% this year, and the current unemployment rate of 5%, is likely to fall to 4.5% by year end.
Mr. Williams said that the biggest threat to the Fed's monetary policy is inflation. However, he noted that, as expected, this figure will grow by 1.5% this year.