San Francisco Fed President John Williams will speak on the economy at the bottom of the hour with audience and media questions to follow.

Williams is a dove but he hasn’t called for QE3. On May 3/4, he said

  • He expects inflation to be in line or “somewhat below” 2% in 2013 and 2014
  • Said he would favor QE3 if he saw a “sustained movement away” from the 2% inflation objective
  • Expects unemployment around 8%
  • If unemployment was “just stuck… over some months” it would raise probability of QE3
  • Said policy was “correctly calibrated”
  • In Feb, he touted MBS buying so he may go in that direction

I can’t imagine Bernanke or Yellen tilting dovish if Williams doesn’t.