Fed's Williams - Faster growth & inflation could force Fed to hike rates rapidly

While talking to USA Today, San Francisco Federal Reserve President John Williams said the Fed could hike rates more rapidly than anticipated on faster growth and inflation. 

Key quotes

Is comfortable with Fed policymakers’ median forecast of three quarter-point rate hikes in 2018. But sees a greater chance of faster growth and inflation prompting four rate increases than of slower gains forcing a pullback to two bumps.

There is some potential the economy is going to outperform my forecast.

I’m not really worried about the economy stalling, which was a concern a few years ago.

I think the economy has very solid momentum.

We don’t need a stimulus right now in terms of short-run growth.

I’m not really worried about inflation taking off.

I expect upward pressure on wages to really show up in 2018 and 2019,  foresees pay increases approaching 3% by the end of the year.

Gradual rate hikes “would be the right thing to do", I think that waiting too long could actually create some risk down the road that the economy does overheat.