John Williams Sees Fed Likely Raising Interest Rates ‘Somewhat’ More

(Bloomberg) -- The U.S. central bank will stick with its campaign of gradual interest-rate increases to extend the economic expansion and keep inflation low, said Federal Reserve Bank of New York President John Williams, stressing policy wasn’t on a “preset” course.

“We’ll be likely raising interest rates somewhat but it’s really in the context of a very strong economy,” he told a community event in New York’s Bronx on Monday. “We’re not on a preset course. We’ll adjust how we do monetary policy to do our best to keep this economy going strong with low inflation.”

The Fed is expected to raise the nation’s short-term benchmark rate at its meeting next month, though the probability of a move has dipped in recent days following signs the housing market has cooled. Investors still see odds at 67 percent that the central bank will deliver its four rate increase of the year at its Dec. 18-19 meeting, according to pricing in interest rate futures.

“Interest rates are still very low,” he said. “Our goal here is to keep the economy strong, keep this expansion going as long as possible.”

Inflation is running at the Fed’s goal of 2 percent amid unemployment at the lowest levels in 48 years, while economic growth in the third quarter came in at a 3.5 percent annual pace.

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