John Williams, the president of the San Francisco Fed and considered close to Chair Janet Yellen, had a few hawkish comments. We bring you the highlights here.
Can we expect an excellent NFP? Is a June rate hike getting closer? Here are some highlights.
Regarding inflation, Williams says that rates should rise before inflation hits 2% and that waiting for a 2% inflation could result in overshooting. Regarding current low inflation, Williams sees that as oil related and transitory. He is even quite confident in the Fed reaching the 2% target in the next few years.
On jobs, Williams mentions that the US is obviously getting closer to full employment. He even sees reaching maximum employment by year end or sooner. The pace of job gains has been quite high in the past three months.
Update: Non-Farm Payrolls + 295K – excellent news  – USD higher
Jobs and inflation: And he is also optimistic on wages: rising wages are set to boost inflation to 2% in about 2 years.
Timing: He does not provide a date, but does say that monetary policy lags mean acting before reaching goals. In general, it is safer to raise rates early and gradually than have to hike sharply and causing a destabilization that could result in damaging the recovery.
Next moves: Williams supports removing the patience wording in March (as Yellen already prepared us). And when rate hikes come, they will not necessarily come at each and every meeting.
This is generally very bullish and hawkish. Does he know something about the Non-Farm Payrolls? We will know soon enough.
In general, he provides more fuel to the US dollar bulls.
More:Â EUR/USD: Trading the US Non-Farm Payrolls
