This monetarist guy cites an aging workforce and lack of productivity capping growth at 2%. Does not want unemployment to fall any lower than current.
Continuing to set up a policy conflict between the Fed and Trump.
San Francisco Federal Reserve Bank President John Williams on Friday repeated his view that the U.S. central bank needs to reduce monetary stimulus before the economy overshoots the Fed's employment and inflation goals and the Fed has to "slam on the brakes."
An aging workforce and low productivity growth will keep the United States from growing faster than about 2 percent annually on a sustainable basis, Williams said
Donald Trump, sworn in as the 45th U.S. president just hours earlier, has promised his economic policies will boost growth to 4 percent.
Williams, who does not vote on Fed policy this year, did not directly address the disconnect, but said the Fed does not want to see the unemployment rate, at 4.7 percent, falling lower and lower, and inflation, now at about 1.75 percent, to rise higher and higher.
Instead, he said, the Fed's goal is stabilize both at near current levels, and to do so, it needs to raise rates further.
Yellen does not seem to be as (to them) hawkish, but these types of comments are becoming more frequent from the non-Yellen cohort among the Fed.
So fiscal help may be on the way sooner from higher rates if this view keeps picking up steam...
Fed's Williams says need to raise rates before economy overshoots https://t.co/ZQEGaTybIY pic.twitter.com/RmXs7asOMk— Yahoo Finance (@YahooFinance) January 21, 2017