US rate rise likely later this year, says top Fed official
A TOP Federal Reserve official said yesterday the United States central bank is likely to start raising interest rates "later this year", and will move them to more normal levels over the next few years.
San Francisco Federal Reserve Bank president John Williams made the remarks at a symposium here on Asian banking and finance, co-hosted by the Monetary Authority of Singapore and the Federal Reserve Bank of San Francisco.
Dr Williams said both the unemployment rate and inflation are gradually moving towards the Fed's target levels, pointing to an interest rate hike later this year.
He expected above-trend economic growth in the US for the rest of the year, after a weak first quarter.
The weak economic growth in the first quarter was an "anomaly" affected by factors such as the weather, said Dr Williams.
The US economy should grow about 2 per cent and unemployment should drift down below 5 per cent this year, he said. But he cautioned that more economic data needs to be collected before a decision on interest rates is made.
He also noted that the "new normal" of slower global growth means markets around the world will have to get used to structurally lower interest rates, even in the longer term.
Dr Williams is a voter this year on the Fed's policy panel and his views are seen as closely aligned with Fed chairman Janet Yellen's.
REUTERS, THE STRAITS TIMES