October 9, 2014 / 9:16 PM / 5 years ago

Fed's Williams: Can't wait too long to raise rates

LAS VEGAS, Oct 9 (Reuters) - A top Federal Reserve official warned on Thursday that the U.S. economy could overheat if the central bank waits too long to raise interest rates.

John Williams, president of the San Francisco Fed, predicted that inflation and employment will be back to normal levels by 2016, which he said suggests that rates must start rising mid-2015.

“If I wait until mid-2016 (to raise rates) there is the danger that our economy could significantly overshoot and create undesirable inflation,” he told reporters after a speech here.

Markets may be expecting the Fed to raise rates a bit later than he himself does, Williams said, but any differences are “small.” (Reporting by Ann Saphir; Editing by Leslie Adler)

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