Higher trade tariffs in US and abroad would be "very bad", Fed´s Williams says

A top US central banker said the strength of the US economy called for gradual interest rate hikes over the next few years, while conceding that the new US administration´s economic policy choices might influence the appropriate pace of policy normalisation.

Nonetheless, for now the Federal Reserve had enough information available to continue on its current path of policy tightening, John Williams, the president of the Federal Reserve bank of San Francisco, said.

Williams also sounded a cautionary note on the potential impact which a wave of higher trade tariffs would have on the economy.

Higher tariffs in the US and abroad would be "very bad" for economic growth.

In a question and answer session at Boise State university, Williams said: "We can already make the decisions we need to make without having any certainty around what the administration or Congress is going to do."

"I'll admit that later this year, next year, what actually happens -- that will influence our look for the economy and then that will obviously influence what the appropriate pace for policy will be," he added.

Absent changes in fiscal, trade or regulatory policy a rate path of three interest rate hikes in 2017 and 2018 "makes senses", he said.

John Williams was not a voting member on the Federal Open Market Committee in 2017.