Fed’s Williams tells Reuters that the central bank may lift interest rates beyond ‘neutral’ level

Senior economics reporter

The Federal Reserve doesn’t necessarily have to pause once it raises interest rates to “neutral,” said San Francisco Fed President John Williams on Friday in an interview with Reuters. Several Fed officials, including Dallas Fed President Rob Kaplan and Atlanta Fed President Raphael Bostic, have suggested the Fed might want to take a break when they get rates up to neutral. But Williams might decide to drive rates into restrictive territory if the economy remains strong and inflation is at or above the Fed’s 2% target. A voting member this year, Williams will take over the leadership of the New York Fed later this month. He said the Fed might roughly get to neutral after three more rate hikes.

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