Fed´s Williams strikes hawkish note

A top US rate-setter struck a hawkish note on Friday despite what he admitted was "a lot of uncertainty" around what fiscal policy would be in 2017 and 2018.

In remarks to Bloomberg TV made on the evening of 3 February, John Williams, the head of the Federal Reserve bank of San Francisco, said the central bank did not need to wait until June to hike interest rates again.

"I wouldn't want to be too timid or delay too long this path of rate increases. I think this economy justifies a gradual pulling back on monetary accommodation."

"I think all our meetings are live."

"Given where we are in the economy -- where the labor market is, where the momentum is -- I think there are some arguments for, and of course against, moving earlier rather than later," he said.

On fiscal policy, Williams said there was a "lot of uncertainty about what fiscal policy will be this year and next year."

Government spending should be focused on mainly on long-term issues like the need to boost productivity growth.

Finally, regarding the Fed´s then current policy of reinvesting and rollowing over financial securities on its balance sheet, he said any changes would depend on the economy´s performance.

"We're not there yet [...] but if the economy continues to preform as it has been doing and we have something like three rate increases, obviously we'll be moving towards a point where we have serious discussion around when to stop reinvestments."