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Fed's Williams: Current policy on 'right track'

April 22, 2014

Washington (Apr 22)    Federal Reserve policy is "on the right track" and efforts to try to spur faster growth might be counterproductive, said John Williams, president of the San Francisco Federal Reserve, in an interview with Bloomberg published Tuesday. Williams predicted the unemployment rate will keep falling and hit 5.5% by the end of 2015. Over the same period, inflation should move higher and come close to the Fed's 2% target, he said. Trying to achieve these goals of full employment and price stability any sooner "would take policy actions that might have more negative effects," such as possibly contributing to risks with financial stability, Williams said. The Fed would probably continue to taper its asset purchases and end them late this year, he said. Williams is not a voting member of the Fed policy committee this year but his views matter because he is seen as a close confidant of Fed Chairwoman Janet Yellen. William's interview is likely going to be the last word from a top Fed official until after the central bank's April 29-30 meeting as the central bankers typically won't talk for one week prior to their next policy meeting.

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