Inflation will move toward 2% over next couple of years
SF Fed President Williams is on the newswires. He is speakig in Salt Lake City:
- Balance sheet unwind will tend to push up long-term rates
- gradual rate hikes over next two years appropriate
- economy to continue on same moderate growth path
- hurricanes to hit employment, output in the near-term
- US has exceeded its full employment mark
- inflation will move to 2% goal over next couple years
- should take about four years to shrink the balance sheet
- rates will need to rise to new normal of 2.5%
The comments are consistent with prior comments from Williams.
Williams is an alternate member on the current FOMC board (he did not vote at the last meeting), and will be a full voting member in 2018.