U.S. Fed official backs gradual rate hikes to foster sustainable growth

BY  | FROM  | 2017-06-27 15:32

U.S. Federal Reserve Bank of San Francisco President John Williams said on Monday that the Fed should keep gradually raising interest rates to foster sustainable growth in the United States.

"Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time," Williams said in a speech published on the bank's official website.

"If we delay too long, the economy will eventually overheat, causing inflation or some other problem. At some point, that would put us in the position of having to quickly reverse course to slow the economy," he argued.

Williams said U.S. economic conditions will warrant further gradual rate hikes in the future, and the central bank is "cognizant of" the global impact of its monetary policies.

"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," he said, adding that's one of the advantages of the gradual approach to monetary policy normalization.

Earlier this month, the Fed raised the benchmark interest rates for the fourth time since December 2015 and unveiled a plan to trim its balance sheet later this year, sending a signal of confidence to the market.

    Related News

      Financial Times

    • Fed fears market misreading of guidance
    • The US Federal Reserve is keen to revamp its forward guidance about future interest rates but terrified of a market misunderstanding, according to the minutes of its September meeting


    • Asian shares rebound after Fed renews dovish credentials
    • Asian shares bounced back and the dollar fell on Thursday after minutes of the U.S. Federal Reserve's latest policy meeting showed policymakers have some concerns about downside risks to the global economy and the dol...


    • Nigeria succeeds at containing Ebola
    • People here are shaking hands again, kissing, hugging, touching. These days, shops are open, people are working, and children are finally going back to 
    Chinese Dictionary: