US central bank to hike rates three or four times in 2017, Fed´s Williams says

The US central bank would likely raise interest two or three times over what was left of 2016, a regional Federal Reserve boss said on Monday.

San Francisco Fed chief John Williams also said three or four interest rate hikes over the course of 2017 was also "about right" a report said referencing Reuters.

His views on the prospects for interest rate hikes were unchanged from those provided after a speech delivered on 13 May at the Sacramento, California Economic Forum.

On that occasion, Williams said that: "Hopefully, if the markets understand our strategy, understand the data the way we do, then they won’t be too surprised by what we do.

"I definitely don’t think we need to go into a meeting with the markets convinced that we are going to raise rates in order for us to raise rates."

Months-long delays in rate hikes "would force our hands a little bit to move much more quickly in 2017," he added.

In the speech delivered on 13 May Williams focused on the slowdown seen in the rate of growth of productivity which was "both real and here to stay".

That meant "the days of 2.5% to 3% growth are behind us, at least for the foreseeable future."

Nonetheless, it wasn´t the 'end of the world', the US could still run a strong economy, he went on to explain.

The US economy generated 2.75m jobs in 2015 as gross domestic product expanded at a 2.0% pace, Williams said to back-up his assertions.

For Williams, the rate of unemployment in the USA had reached its so-called 'natural' rate, overall the US economy "was looking good" and inflation would rise to its 2% inflation target in the next two years.