San Francisco Fed President: "No Signs Bubble About to Burst"

San Francisco Fed President John Williams cannot spot any bubbles. He wants gradual hikes.

In a clear effort to ease market fears, John Williams says market rate hikes will be gradual and the Fed Needs to "Stick to That Plan".

The U.S. central bank should stick to the plan of gradual rate hikes even though the economy has shown such “buoyancy” recently,” said San Francisco Fed President John Williams on Friday.

In a speech to the Financial Women of San Francisco, Williams insisted the Fed should not “have a knee-jerk reaction to all this positivity” about the economy.

Raising rates too rapidly could knock the expansion off track “and that’s the last thing I want to see happen,” Williams said.

In his speech, Williams noted that inflation appears to “finally” be turning higher toward the Fed’s 2% target, but added he did not think the economy was overheating.

For the moment, I don’t see signs of an economy going into overdrive or a bubble about to burst, so I have not adjusted my views of appropriate monetary policy,” he said.

Thanks John, for the laugh of the day. Central bankers never see bubbles. Why? They created them.

Williams' statements are in contrast to those made by Alan Greenspan just a few days ago. For details, please see the Man Who Said "Bubbles Only Identified When They Burst" Suddenly Detects Bubbles.

Mike "Mish" Shedlock

No. 1-25

and, if the root cause is voters, the root cause is human nature, which causes people to vote for people who promise them stuff. All democracies eventually fail because people learn that they can be elected by making voters dependent on government, which in turn eventually bankrupts the democracy.



I wasn't much worried about the bubble until the fed said "don't worry about it". Now I'm very worried!


If the root cause is politicians, or their bureaucrats, then the root cause is actually voters. And if the root cause is voters, then the root cause is actually the bad ideas they accept. Like the unnamed belief that we can all have our cake and eat it too. Which pretty much sums up the culture of a welfare state.


“Sleeping at the wheel in 2007/8 and getting away scot-free for it. In fact Bernanke got a second term” ~ Killben

Hold your horses! The banking system was given a stress test in July 2008 by House Financial Services Committee Chair Barney Frank (D-MA). He declared that it was sufficiently well capitalized and in good health. Not even sixty days later came September 15, the date when Lucifer purchased Henry Paulson’s soul. The govt types covered for each other. The Wall Streeters did not. Lehman was still on the phone trying to get bridge loans when Goldman Sachs put out the word to cut those bastards out. Funny, you might’ve thought the Bear Stearns debacle in Marcyh ‘08 would have shown the lay of the land. Greed is a weapon in the hands of these bankers.