US economy likely to return to health over next two years, with normal inflation and full employment, and interest rates will rise as Federal Reserve phases out long period of extraordinarily easy monetary policy, says top Fed official

WASHINGTON , June 25, 2014 () – The U.S. economy is likely to return to health over the next two years, and interest rates will rise as the Federal Reserve brings a long period of extraordinarily easy monetary policy to a close, a top Fed official said on Tuesday.

"We are about two years off from being an economy that's at full employment, back to normal, and inflation back to normal levels," San Francisco Fed President John Williams said at the 20th Annual Stanford Directors' College. "I am pretty optimistic about the mid-term outlook in terms of economy growth."

Williams did not offer any specific economic forecasts, nor did he say when he expects the Fed to begin raising rates. "It's pretty clear that interest rates over the next five years are going to head up, not head down," he said.

(Reporting by Ann Saphir; Editing by Leslie Adler)

* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.