The Federal Reserve should stick with its plan to raise interest rates gradually, a top policymaker said on Thursday, given his view that unemployment is headed to 4.5 percent by late this year and inflation is set to reach 2 percent in two years.
San Francisco Fed President John Williams said his outlook has changed little since December, when he and other U.S. central bankers raised interest rates for the first time in almost a decade and signaled they were inclined to hike borrowing costs four more times this year.
That was before a global stock market selloff fueled by fears of a renewed world downturn put the Fed on policy hold in January as it sought to assess the uncertain impact on the U.S. economy.
"Despite the Sturm und Drang of international and market developments, the U.S. economy is, all in all, looking pretty good," Williams told an event organized by Town Hall Los Angeles. "I therefore continue to see a gradual pace of policy normalization as being the best course."
Economists polled by Reuters now see just two rate hikes this year. Traders are betting even odds at best of a single rate hike.
Reference: CNBC
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