The Jakarta Post
Federal Reserve Bank of New York president John C. Williams said on Wednesday the United States Federal Reserve would likely continue with its policy on gradual hikes of the Fed Fund Rate due to strong data on the US labor market.
“Looking forward, I expect that further gradual increases in interest rates will best foster a sustained economic expansion and achievement of our dual mandate goals,” Williams said during the central banking forum on the sidelines of the International Monetary Fund-World Bank Group Annual Meetings in Nusa Dua, Bali, on Wednesday.
He said the US unemployment rate was 3.7 percent and the inflation rate was on target, while the rate was expected to slip to below 3.5 percent next year or the lowest in the last 50 years.
The country’s gross domestic product (GDP), Williams added, would increase by around 3 percent this year and by 2.5 percent next year.
“In keeping with this strong economic outlook, I expect price inflation to move above 2 percent,” he said.
The Fed has raised the interest rate three times this year and is expected to increase it further this year, two or three times next year and once in 2020.
Williams said the US’ normalization of its monetary policy was close to an end. “The Federal Open Market Committee has been slimming down its statements lately, using less forward guidance about the future path of policy. […] That’s a sign that we are nearing the end of the process of normalizing our monetary policy.” (bbn)