Fed's Williams: Fed funds rate should rise before inflation hits 2%

FXStreet (Bali) - John Williams, President of the Federal Reserve Bank of San Francisco is speaking on the economic outlook for the US, noting that Fed funds rate should rise before inflation hits 2%.

Additional headlines via Bloomberg & Reuters

US obviously getting much closer to full employment

Rising wages to boost inflation to 2% in about 2 yrs

Waiting for 2% inflation may mean overshooting

Monetary policy lags mean acting before reaching goals

Says cheap oil, strong dollar to prove transitory

Quite confident in reaching 2% inflation next few years

Sees reaching maximum employment by year end or sooner

By mid-year, Fed should seriously discuss raising US rates

Safer to raise rates early, gradually, than wait and have to hike sharply

Waiting too long to raise rates risks overshooting on inflation

Overshooting could force sharp rate hikes, destabilizing markets and damaging recovery

Sees inflation returning to normal over next two years