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Rates May Stay Low Through 2015: Fed's Williams

Javier E. David|Special to CNBC.com
Friday, 31 Aug 2012 | 9:49 AM ET
Dr. John C. Williams, President and CEO of the Federal Reserve Bank of San Francisco
Source: frbsf.org
Dr. John C. Williams, President and CEO of the Federal Reserve Bank of San Francisco

A top Federal Reserve policymaker told CNBC Friday that interest rates may remain at rock-bottom levels for at least three more years and that more easing might be needed to combat high US unemployment and sluggish economic growth.

San Francisco Fed President John Williams, in an interview from Jackson Hole, Wyo., said he was "concerned that we could be stalling at the current high level of unemployment."

As a result, more bond-buying from the Fed in the form of quantitative easing (learn more) might help, he added. (Read more:What Do Markets Expect From Jackson Hole?)

"Without further accommodation I see the unemployment rate staying right around where it is now…at least for another year and a half," said Williams, who is a voting member on the Fed's Open Market Committee (learn more). He also stated he could see rates remaining at zero until 2015.

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"Given our mandated goals…I think the extra or additional monetary accommodation would be very useful to help boost the economy, speed the recovery along somewhat, and help get employment toward its full employment goal over the next few years," he added.

Williams' remarks come hours before a highly anticipated speech by Fed Chairman Ben Bernanke, and amid a pitched debate about whether more stimulus would really help boost the economy.

On Thursday, Atlanta Fed President said that more quantitative easing was "a close call" given the weakness of both labor markets and economic activity. (Read more: More Fed Easing 'A Close Call': Fed's Lockhart)

Correction: An earlier version of this story mischaracterized Williams’ status on the FOMC. He is a rotating member.

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