Fed’s Williams: Possibility of fiscal stimulus is “really not that important” for rate changes this year - FT

In an interview with the Financial Times (FT) San Francisco Fed President, John Williams, posted optimistic comments following higher wage inflation figures published last Friday.

Key Quotes:

 “If you were to ask me three years ago, four years ago, when unemployment was still high and the economy was still digging out of a hole, I would have said, sure, fiscal policy would be great to help expedite getting back to full employment — short term fiscal stimulus,” 

“But today I don’t think we need short-term fiscal stimulus. What we need is really better policies and investments in the long term health of the economy.”

“If the economy ends up for whatever reason — fiscal policy or other things — growing faster, if we have more job growth and inflationary pressures pick up, then we will have to raise rates faster. If the economy underperforms we will raise interest rates slower.” 

“The stars are aligning in a way. Unemployment has come down. Job growth has been good. Other indicators like the Conference Board survey asking people how hard it is to find a job — that has gotten strong for the last year or so. It is really that all the things are moving together”.