Fed's Williams sees more rate hikes, not worried on yield curve

FILE PHOTO: President and Chief Executive Officer of the U.S. Federal Reserve Bank of San Francisco, John Williams, gestures as he addresses a news conference in Zurich, Switzerland September 22, 2017. REUTERS/Arnd Wiegmann/File Photo

(Reuters) - Continued gradual rate increases are the “right forecast” for the Federal Reserve for the next couple years amid stronger U.S. and global economic growth, fiscal stimulus, a strong labor market, better wage growth and stable inflation, a U.S. central banker said on Friday.

San Francisco Fed President John Williams, who will take over the New York Fed in June, also said he is not very concerned about the flat yield curve that some investors worry is an early signal of a coming economic slowdown. The yield curve will likely steepen as the Fed trims its balance sheet and as the federal government issues more debt to fund fiscal stimulus, Williams said in Pebble Beach, Calif.

Reporting by Ann Saphir in San Francisco; Editing by Chizu Nomiyama