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San Francisco Fed's president sees 2 to 3 rate hikes in 2016


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San Francisco Fed's president sees 2 to 3 rate hikes in 2016

JohnWilliams, president and CEO of the Federal Reserve Bank of San Francisco, said April12 that he expects two to three additional rate hikes in 2016, assuming no majorchanges in data on unemployment and inflation.

Speakingwith reporters April 12 at LendIt USA, a conference in San Francisco focused onfinancial technology, Williams said unemployment has actually performed better thanexpected along with a helpful increase to the labor force participation rate. As a member of the FederalOpen Market Committee, Williams has a say on the pace of rate increases.

"Idefinitely see two or three rate hikes [this year] being consistent with what yousee in the projectionsas being reasonable. I'm not saying that's a prediction of what we will do becauseevery time we make a forecast, the data changes and the outlook changes," Williamssaid.

Askedwhether he would need to see inflation move closer to the 2% target the FederalReserve has set, Williams said that was not a requirement as the economy appearsto be on its way.

"Idon't need to see inflation moving higher than where it is now. … I think the pathwe're on is a good one," he said.

Williamssaid his own forecast does not project 2% inflation until the end of 2017.

Also,he said more turmoil in the equity markets would not necessarily change his thinkingon the pace of rate increases. Volatility to kick off the year was more due to weaknessin China and other parts of the global economy and not necessarily the Fed's .

"Wedon't want to let that feed back into us worrying that this is about us. It's actuallynot all about us. It's about what's happening in other countries," Williamssaid. "I always go back to the same point: The U.S. economy is actually doinggood."