Fed's Williams Sees 'No Reason Whatsoever' to Rush With Rate Increases

The Federal Reserve shouldn’t raise interest rates too soon because the U.S. economy still needs the support of easy monetary policy, said John Williams, president of the San Francisco Fed.

“I see no reason whatsoever to rush to tightening,” Williams told reporters in Boston.

“This is a U.S. economy that although doing a lot better, still needs monetary accommodation for above-trend growth.” He added that he doesn’t rule out tightening later in the year.

Most members of the policy-setting Federal Open Market Committee expect to begin raising rates for the first time since 2006 some time this year. Williams, who is a voting member of the FOMC this year, last month said June was a reasonable starting point to think about liftoff.

He said divergence in monetary policies between the Fed, the Bank of Japan and the European Central Bank will “create some turbulence” in financial markets.

The euro weakened to an almost nine-year low versus the dollar amid investor concern Greece might leave the currency union and on speculation the ECB has moved closer to large-scale sovereign-bond purchases.