San Francisco Fed President John Williams February 2017 Speech

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Our goal is to attain a goldilocks economy

“Our goal is to attain what I like to call a “Goldilocks economy”—an economy that doesn’t run too hot or too cold. We want the porridge to be just right. Of course, it’s not always easy to achieve that just-right economy. Financial booms and busts such as the dot-com and housing bubbles of the past few decades can cause economic swings despite our efforts to contain them. But carefully designed monetary policy can help smooth out those fluctuations and protect families from economic turmoil.”

A rate increase is very much on the table for serious consideration

“In December, the FOMC nudged rates up and projected that we’d likely raise interest rates gradually in 2017. Specifically, the median projection was for three increases this year.3 We stood pat after our meeting a month ago, but we’ll meet again in March to assess whether the time is right to raise rates further. In my view, a rate increase is very much on the table for serious consideration at our March meeting. I’ve been publicly supportive of a gradual increase in rates, and I am confident that the economy will continue to grow at a healthy pace even as we raise rates. The aim is to keep the economic expansion on a sound footing—not too hot, not too cold—that can be sustained for as long as possible. The last thing we want is to undermine the hard-won gains we’ve made since the dark days of the recession.”