The pace of upcoming rate hikes should be "pretty gradual" over the next few years, said John Williams, the president of the San Francisco Fed, on Monday. In a sit down with reporters on the sidelines of the American Economic Association annual meeting, Williams said his preference for a slow tightening pace reflects an economy that needs accommodative monetary policy to have strong growth. Another factor is that, over many years, longer-term real interest rates globally are likely to be much lower than they were in the 1980s and 1990s, he added. Williams said he thinks a rate hike this year will be appropriate, but added he is in "no rush" to tighten. He said that mid-2015 is a reasonable guess of when the Fed will first ask "should we do it now or wait a little longer." Williams, a close ally of Fed Chairwoman Janet Yellen, will be a voting member of the Fed policy committee this year.
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