San Fran Fed's Williams's speech due to be given in Sydney shortly 26 June
- sees inflation reaching Fed's 2% goal in 2018
- very strong US jobs market carries risks
- sees unemployment falling further, remaining a little above 4% through 2018
- consensus for new normal/neutral Fed funds rate now somewhat below 3%
- need to keep raising rates to keep economy expanding as long as possible
- last thing Fed wants to do is cause unnecessary volatility
- Fed expects to start shrinking balance sheet this year
- no problem to hike rates and start winding back balance sheet at same time, but sees no need to do that
Williams due to speak shortly. The text has just been released but currently talking to reporters.
He is a "3 rate hike in 2017" man and has previously talked about reducing bal sheet by end of this year.
Markets suitably unfazed by latest , in-line, comments.
GBPUSD 1.2740, USDJPY 111.32 EURUSD 1.1191
SF Fed head Williams - further, gradual rate hikes needed