John Williams, the President of the Federal Reserve Bank of San Francisco has expressed his concerns with the global economy, namely China and Brazil, which he believes is having a sizable impact on the U.S. economy and is hampering policymakers from making key decisions on interest rates.
Uncertainty in global finance alongside global economic developments has been feeding back to the dollar and the U.S. economy, Williams said during a recent CNBC interview.
“The real issue is the global financial and economic developments. There’s uncertainty about what’s happening around the world and how that feeds back to the dollar and the U.S. economy,” Williams said.
“We understand that we’re in a global economy so what happens in Brazil or China has a huge impact on the U.S. in terms of our inflation and employment goals,” he added.
In regards to the U.S. economy, Williams said that the world’s largest economy is doing “quite well,” as which he sees stable inflation and strong job growth.
The U.S. economy expanded at a faster clip than what was expected in the fourth quarter, clocking a 1.4 percent increase, verses a prior Commerce Department estimate of 1 percent, according to figures that were issued on Friday.
Williams, when asked about the Fed’s intended message, said that “I would say there’s a broad agreement on the committee that our basic strategy, which is to gradually remove policy accommodation and raise interest rates over the next couple of years, has strong support. The real question is when we should raise rates, what pace we should raise rates. That’s going to be driven by the data so we’ll have to wait and see.”