John Williams, president of the Federal Reserve Bank of San Francisco, while expressing optimism the economy is well on its way to recovery, says the Fed will need to keep interest rates near zero until the middle of next year. Speaking to members of the Utah and Montana Bankers Association, he said with inflation rising back to normal levels, unemployment falling and economic growth returning, the Fed is tapering its stimulative bond-buying program and intends to end it this fall. The Fed’s swollen balance sheet of over $4 trillion will hopefully shrink at some point to contain no mortgage-backed securities, according to reuters.com. Williams predicts gross domestic product (GDP) will grow more than three percent through the end of this year, as unemployment falls to six percent, eventually dropping to 5.5 percent by the end of 2015, as MHProNews understands. ##
