(Reuters) - One day before U.S. President-elect Donald Trump is set to be sworn in, an influential Federal Reserve policymaker said that while there is uncertainty over the economic outlook, it is no more pronounced now than it usually is.
“We always have uncertainty when we are making monetary policy,” San Francisco Federal Reserve Bank President John Williams told the Solano Economic Development Corporation in Fairfield, California on Thursday. “It’s not just about fiscal policy, the new administration, the new Congress. Obviously there are a lot of questions about what those policies will be and what that means for the economy, and we are focused on that.”
But there are equally, he said, plenty of unknowns about the global economic environment and commodity prices, both of which have delivered shocks to the U.S. economy in recent years. What is different now, he said, is that the unknowns appear to be relatively balanced, with surprises just as likely to be positive for the economy as negative.
“I, and most of my colleagues, view today’s uncertainty as kind of the same, broadly the same as what we’ve experienced throughout our careers,” Williams said.
In words that echoed nearly exactly the phrasing of Fed Chair Janet Yellen on Wednesday, Williams said that it “makes sense” for the Fed to raise interest rates now, given the progress made in the recovery since the recession.
While the Fed currently expects to be able to raise rates gradually, he said, “we are always ready to change our views of the economy...and figure out what’s the best path for interest rates to achieve our goals.”
Reporting by Ann Saphir; Editing by Meredith Mazzilli and Diane Craft