3 May 2016
Fed Williams: "Makes sense to move rates back to normal"
The President & CEO of the Federal Reserve Bank of San Francisco, John Williams, has been speaking as part of a panel, the topic is Systemic Risk. There is not much for the market to go on here and much of the same from Williams as usual.
Williams suggested that the Fed takes spillovers from the rest of the world into account, but explained that the largest systemic risk today are big declines in broad classes of assets as rates rise although the fact the Fed is able to raise rates is a positive for the global economy and it makes sense for the fed to move rates back to normal over the next couple of years. Last key take-away is that he said the 'new normal' level of US interest rates may be as low as 3%.
Williams suggested that the Fed takes spillovers from the rest of the world into account, but explained that the largest systemic risk today are big declines in broad classes of assets as rates rise although the fact the Fed is able to raise rates is a positive for the global economy and it makes sense for the fed to move rates back to normal over the next couple of years. Last key take-away is that he said the 'new normal' level of US interest rates may be as low as 3%.