SF Fed dove Williams expects growth to continue
SF Fed dove Williams expects growth to continue at around 2.5% yearly with a positive outlook and tailwinds from fiscal stimulus and global growth. Despite the good economic outlook, he sees no evidence that the neutral interest rate is rising, remains around 2.5%. He favors further gradual interest rate rises, but is conscious that rates remain at low historical levels. Yet he believes that data shows that productivity remains stuck "in low gear" and tax cuts and increased business investment are not likely to change it that much. Williams will soon move over to head the NY Fed and his remarks are in line with his moderate reputation. Yields meanwhile continue to probe higher.