March 24 A top Federal Reserve official seen as
closely allied with Fed Chair Janet Yellen is sticking to his
view that the U.S. central bank probably won't be raising
interest rates until the second half of 2015, according to an
interview published on Monday.
San Francisco Federal Reserve Bank President John Williams
also played down Yellen's comment last week that suggested rates
could rise somewhere around six months after the Fed ends its
massive bond buying stimulus program, a timetable that would put
a first rate hike some time next spring.
Markets were caught off guard by the remark, with stocks
selling off as traders priced in a slightly earlier rate hike
than previously expected.
"I really don't see anything of what we said as suggesting
that we're going to tighten monetary policy sooner rather than
previously," Williams told the Washington Post in an interview
that took place on Friday.
But he also acknowledged that the rapid decline in
unemployment is consistent with a slightly faster timetable for
lifting short-term rates, which the Fed has held near zero since
"As we get toward the end of 2016, sure, we're maybe
normalizing monetary policy out there a little bit more than
people thought in December," Williams said. "In the big picture,
whether it's at one meeting or the next meeting doesn't matter
nearly as much as getting the general path of policy in the
(Reporting by Ann Saphir; Editing by Chris Reese)