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Williams, John on 2018 April 6

Our recent projections indicate that the center of the distribution of FOMC projections foresees a total of three to four rate increases this year and further gradual rate increases over the next two years, bringing the target federal funds rate to around 3-1/2 percent by the end of 2020. In my view, this is the right direction for monetary policy.

The good news is for most of the past year, inflation has been running closer to 2 percent. With the economy strong, and strengthening further, I expect that we’ll see inflation reach and actually slightly exceed our longer-run 2 percent goal for the next few years. ... [O]ur recent projections indicate that the center of the distribution of FOMC projections foresees a total of three to four rate increases this year and further gradual rate increases over the next two years, bringing the target federal funds rate to around 3-1/2 percent by the end of 2020. In my view, this is the right direction for monetary policy. ... To sum up: the outlook is very positive. The economy is on course to be as strong as we have seen in many decades and inflation is moving closer to our target. The challenge for monetary policy is to keep it that way. This is never an easy task, but we are well positioned to achieve our goals, and to respond to any unexpected twists and turns that may lie in the economic road ahead. Williams, John

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