Will need accomodative policy for a few years
He adds:
- Decision October FOMC will be taken at meeting
- Will need accommodative policy for a few years
- Fed policy will be accommodative after liftoff.
- Declines to say how he will vote at October FOMC
- Growth is still around 2%, according to his forecasts
- Healthy sign pace of growth slowing a bit
- Says he expects jobless rate to go below 5%
- US economy is still on a good trajectory
- Takes about a year or two for policy actions to impact
- Trying to look through month on month swings for a general trend
- Expects further job gains
- Some of the slowdown in jobs is due to a stronger dollar
- Sees 2nd half growth at 2% annual rate
- Inflation will return to 2% of the next couple years
- Sees 2 to 2.25% GDP growth in 2016
- Zero interest rates likely not needed in near future
- US will be running high pressure economy next 2 years; will bring people into labor market
- Yellen has enormous respect for her Fed leadership
- Sees strong arguments on both sides on fed liftoff
- Fed has tried hard to be more transparent
- US faces significant headwinds from abroad
- Energy prices holding down overall inflation; underlying inflation not nearly as low
- Natural rate of interest rates likely to be lower
- Argues for gradual pave of removing accomodation
- Prefers to go a bit earlier, then go gradually.
- Fed can lower rates after liftoff if needed.
On October 6th, William's said that employment need only grow by 100,000 to "feed a healthy labor market". He also said, "I see this as the year we start the process of monetary policy normalization". His comments came after the lower than expected NFP report. His comments today are consistent with these earlier comments
