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US monetary policymakers are “as close … as we’ve ever been” to satisfying the Federal Reserve’s dual mandate, and investors should not “rule out” more than three total rate increases this year, John Williams said on Wednesday.

The San Francisco Fed boss applauded the rebound in the US economy since the end of the 2008 recession in a speech to The Forecasters Club in York.

“With an economy at full employment, inflation nearing the Fed’s 2 per cent goal, and the expansion now in its eighth year, the data have spoken and the message is clear: We’ve largely attained the hard-sought recovery we’ve been after for the past nine years,” he said.

Mr Williams, who is an alternate member of the policy-setting Federal Open Market Committee, added that the conversation should now shift from “‘how do we achieve a sustained recovery?’ to ‘how do we sustain the recovery we’ve achieved?’”.

He said that as it stands today, “monetary policy still has the pedal to the metal” despite the rate increase in March, the central bank’s third since the end of the financial crisis.

As such, Mr Williams said he agrees with the median forecast among FOMC members of three total rate increases this year, but cautioned that “upside risks” raise the chance of a more rapid pace of tightening.

Copyright The Financial Times Limited 2017. All rights reserved.
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