U.S. Federal Reserve Bank of San Francisco President John Williams said on Monday that the Fed should keep gradually raising interest rates to foster sustainable growth in the United States.
"Gradually raising interest rates to bring monetary policy back to normal helps us keep the economy growing at a rate that can be sustained for a longer time," Williams said in a speech published on the bank's official website.
"If we delay too long, the economy will eventually overheat, causing inflation or some other problem. At some point, that would put us in the position of having to quickly reverse course to slow the economy," he argued.
Williams said U.S. economic conditions will warrant further gradual rate hikes in the future, and the central bank is "cognizant of" the global impact of its monetary policies.
"The last thing we want to do is fuel unnecessary or avoidable volatility or disruption - whether we're talking about domestic markets or international markets," he said, adding that's one of the advantages of the gradual approach to monetary policy normalization.
Earlier this month, the Fed raised the benchmark interest rates for the fourth time since December 2015 and unveiled a plan to trim its balance sheet later this year, sending a signal of confidence to the market.
