REFILE-Fed's Williams: U.S. economy about two years from being 'normal'

Tue Jun 24, 2014 7:03pm EDT

(Refiles to fix quote in 2nd paragraph to say "economic growth," not "economy growth")

PALO ALTO, Calif., June 24 (Reuters) - The U.S. economy is likely to return to health over the next two years, and interest rates will rise as the Federal Reserve brings a long period of extraordinarily easy monetary policy to a close, a top Fed official said on Tuesday.

"We are about two years off from being an economy that's at full employment, back to normal, and inflation back to normal levels," San Francisco Fed President John Williams said at the 20th Annual Stanford Directors' College. "I am pretty optimistic about the mid-term outlook in terms of economic growth."

Williams did not offer any specific economic forecasts, nor did he say when he expects the Fed to begin raising rates. "It's pretty clear that interest rates over the next five years are going to head up, not head down," he said. (Reporting by Ann Saphir; Editing by Leslie Adler)

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