Feb 18 (Reuters) – New York Federal Reserve President John Williams said on Friday it would be appropriate for the central bank to start raising interest rates in March in response to high inflation and strong job growth. .
“With today’s strong economy and inflation well above our long-term goal of 2%, it’s time to begin the process of steadily moving the (interest rate) target range back to more normal levels.” “, he said at a virtual event organized by the University of the City of New Jersey.
“In particular, I hope it will be appropriate to raise the target range at our next meeting in March,” he added.
After interest rate hikes kick in, the next step would be for the Fed to start reducing its holdings of Treasury and mortgage-backed securities, said Williams, who expects that process to start later this year.
He said he expects US real GDP to grow just under 3% this year and the unemployment rate to fall to around 3.5% by the end of 2022.
In addition, it projects personal consumption expenditure (PCE) price inflation to ease to around 3% and fall further next year as supply challenges improve.
(Reporting by Jonnelle Marte, Editing in Spanish by Manuel Farías)