SF Fed President Williams: The End Of 'Unusually Stimulative Monetary Policy' Is 'Well Off In The Future'

golden gate bridge

Photo: zoonabar via flickr

Don’t bet on the Fed’s low interest rate policy ending anytime before its slated expiration in 2014, says San Francisco Fed President John Williams.In a presentation given in San Diego yesterday and today, Williams said accommodative monetary policy is here to stay.

“Unusually stimulative monetary policy won’t last forever. Eventually, as recovery picks up, we will trim our securities holdings and raise our interest rate target. We’ve planned in detail for this, and we’re confident we can do it in a timely and effective fashion. But, that time is still well off in the future.”

Despite improving measures like access to credit and business and consumer confidence, Williams said, unemployment remains unacceptably high. Construction also remains decimated, and uncertainty still prevails. 

And all of these trends are nationwide, Williams said.  He provided this chart demonstrating the weakness in job growth:

state differences

Photo: Federal Reserve Bank of San Francisco

Finally, Williams echoes Chairman Bernanke’s (and Atlantic Magazine’s) argument that Fed policies have been critical to the recovery.

“Things would be much worse if we hadn’t acted so forcefully,” Williams said.

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