Comments from San Francisco Fed President John Williams:

  • Rate rises to be slow and gentle
  • US economy has a good head of steam
  • Expects inflation to reach or be near 2% by end-2017
  • US economy still needs accommodative Fed policy
  • An economy that runs too hot can generate imbalances
  • Fed has 'a ways to go' before shrinking balance sheet
  • Will take at least 6 years to normalize balance sheet
  • Downside risks include dollar, spillovers from abroad
  • Sees labor market 'that's growing ever stronger'
  • Sees US unemployment rate around 4.5% by mid-year
  • Upside risks to US include housing
  • Doesn't see much pickup in labor force participation
  • Williams is delivering the speech in California

It's optimistic and fitting with the bulk of the FOMC. I think good weather spilling into economic data will keep the Fed in a positive mood until about June.

Kinda looks like the ForexLive logo. Thanks to the SF Fed for the shirt.