At a time when the market is anticipating over the timing of potential rate hike by the US Federal Reserve, a top Fed official on Friday said that the central bank is still on track to increase the interest rates in the coming six months or so.
Hinting towards the possible time frame for key rate hike, San Francisco Fed President John Williams said, “Around mid-year is a good guess when the central bank may commence raising interest rates.”
Williams made the comments during an interview with CNBC.
He, however, clarified that he is not predicting an increase in interest rate in June or at any other fixed meeting.
The US Federal Reserve Bank has held the interest rate at zero since December 2008.
“I see the American economy entering into the year 2015 with a lot of momentum for very optimistic growth,” he said.
The Fed official underscored his view that the country’s economy will be growing at a pace of three percent this year and the rate of unemployment will decline to five percent by the end of this year.
“I see us getting to full employment basically by the 2015-end or before then,” Williams said.
According to him, the country’s inflation will begin to pick up back to the two percent target set by the US central bank in the second half of this year, and will attain that target by the end of 2016.
Earlier this week, the Fed made a policy statement after the crucial two-day meeting, saying it will adopt a ‘patient’ approach while deciding upon when to increase the key rates.
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