US to see growth boom, but Fed's Williams says inflation not a worry

WASHINGTON: The US economy is likely to see its fastest growth in nearly four decades this year, but the short-term inflation spike that will come with the rebound is not a cause for concern, a top Federal Reserve official said Monday.

The world's largest economy still needs to see several months of strong employment growth to achieve a full recovery, said John Williams, president of the Fed's influential New York branch, stressing that the central bank will be in no hurry to alter its stimulative policies.

US GDP will expand by around seven percent this year as it bounces back from the Covid-19 pandemic, Williams said, calling it "welcome progress after the toughest period for the economy in living memory."

But "While I am optimistic that the economy is now headed in the right direction, we still have a long way to go to achieve a robust and full economic recovery," Williams said in a speech to the Women in Housing and Finance annual conference.

He credited the Fed's stimulative policies, including interest rates near zero, with having "positive effects" on the economy, enabling Americans to purchase homes and big-ticket goods.

"In fact, with accommodative financial conditions, strong fiscal support and widespread vaccinations, I expect that the rate of economic growth this year will be the fastest that we've experienced since the early 1980s," he said.