By Ann Saphir
SAN FRANCISCO (Reuters) - San Francisco Federal Reserve President John Williams said Tuesday that he would support an interest-rate hike in June as long as he sees continued progress on the economy, inflation and jobs.
If inflation keeps rising toward the Fed's 2-percent target, economic growth rebounds toward his 2-percent forecast for the year, and job gains continue to be strong, "it would be appropriate" to raise rates in June, Williams said in an interview on Bloomberg Radio.
Williams does not vote on the U.S. central bank's monetary policy committee this year under the Fed's rotating system, but he participates in its regular meetings to decide on policy. The next such meeting is June 14-15.
If the economy were to perform worse than expected or was hit by a shock, he added, the Fed would need to pause, and there is plenty of economic data to be published between now and June that could swing his view one way or the other.
But overall, the Fed ought to be raising rates over the next couple of years, he said.
The Fed raised rates in December for the first time in nearly a decade, but has held them steady since then on uncertainty over the effect of weakness in China, Japan and Europe on U.S. growth prospects.
Williams said Tuesday he supported the pause so far this year. But, he said, if the economy meets his baseline forecast, rates should rise in June.
First-quarter U.S. economic growth, reported at just 0.5 percent, will probably rebound this quarter, he said, judging from strong job gains that have pushed unemployment down to 5 percent, half its level at the depths of the recession.
"It's not about tightening policy so much as pulling back a little bit" on monetary accommodation, Williams said.
The Fed currently targets a short-term benchmark policy rate of 0.25 percent to 0.5 percent, and maintains a $4 trillion balance sheet that pushes down on long-term borrowing costs.