Fed’s Williams: ‘We’re ending the year with some very good momentum going into 2018’ - WSJ

Headlines are crossing the wires from the San Francisco Fed President Williams’ interview with the Wall Street Journal (WSJ) that took place last Friday.

Key Quotes:

“We’re ending the year with some very good momentum going into 2018.”

“We are operating on all cylinders, which is, I think, a positive sign in terms of the sustainability of the expansion.”

With inflation likely to rise and unemployment likely to fall further, “something like three rate increases next year, and two to three increases in 2019—that seems like a reasonable view.”

A strong economy eventually creates higher inflation.

As we move interest rates back up to more normal levels as the economy improves, that will reduce the risks of the economy overheating.

Expects the economy to grow by 2.25% to 2.50% next year.

“We are not in a rush to tighten monetary policy.”

“If the economy performs as expected, fed is likely to raise rates steadily over next couple of years.”

“I’m not worried about that in terms of the possibility of a recession in the next year or two.”

“We are now in the midst of the third longest expansion, and I think we’ll get to be the second longest expansion in coming months. My goal is to try to keep the economy on a sustainable pace.”