It’s time for the Federal Reserve to raise the interest rate. That’s the message being delivered by a U.S. Central Banker.
“I do think it makes sense to gradually remove the policy of accommodation that helped get the economy to where we are,” San Francisco Federal Reserve Bank President John Williams told the Arizona Council on Economic Education.
Williams, a centrist policymaker, who served as Fed Chair Janet Yellen’s chief researcher when she had his job before moving to Washington, is leaning toward support of a December rate hike.
When asked by a reporter if he was leaning towards a December rate hike Williams declined to say. However, he said there would be “a lot of data” examination between now and then. “I am going to wait and see on that,” he added.
The Fed has kept the interest rate at nearly zero for almost seven years. The central bank last month said it would consider a rate increase at its December 15 to 16 meeting.
On Saturday, Williams said he believes that factors holding inflation down, including weak oil prices and a strong dollar, should soon ebb and allow inflation to bounce back.
He says that increasing rates soon rather than later would lead to a “smoother, more gradual process of policy normalization.”
If the fed does increase the rate it is expected to be a slow and gradual increase meant to stymie the effects of negative economic headwinds on a global basis.