Fed official sees less risk of rate retreat after lift-off

San Francisco

AS the US job market improves, the risk is receding that an unexpected setback could derail the recovery once the Federal Reserve raises interest rates, San Francisco Fed President John Williams said.

Concern that it could be forced to retreat to near-zero interest rates, where the Fed has little room to maneuver, if it pulled the trigger too soon has been a significant reason the Fed has kept rates pinned to the floor well into the recovery. With that less of a threat, policymakers can now focus on charting an appropriate rate path and worry less about sliding back to zero, Mr Williams said in an interview late on Friday, expressing a view that appears to have taken root more broadly at the central bank.