Comments from San Francisco Fed President Williams:

  • Unemployment to fall to 7.25% by the end of 2013
  • Any trim of QE wouldn’t mean the Fed is tightening
  • Public sector is ‘holding the recovery back’
  • Forecasts inflation will rise to 1.75% in 2015
  • Forecasts GDP growth of 2.25% in 2013 and 3.25% in 2014
  • Housing is ‘springing back to life’
  • Before cutting QE the Fed will need to be more sure of recovery’s momentum and that inflation drop is temporary

The low inflation forecast is my main takeaway from his comments and suggests he’s close to Bullard’s camp.