SF Fed President John Williams reiterated the dovish argument

  • Economy showing signs of improvement, it still faces “serious menaces”
  • Fed will likely have to continue its so-called quantitative easing “well into the second half of next year.”
  • Likely continue needing to purchase MBS & treasuries well into 2nd half of 2013
    • Fed still has scope to stimulate economy without igniting inflation
    • Unemployment well above Fed mandate, inflation is below
    • Fed’s policies having the desired effect
    • Sees Unemployment above 7pct through at least end of 2014, only slightly below 2pct next few years