Fed’s Williams changing allegiance to join hawkish calls for QE cut

The drumbeat to reduce the rate of bond purchases by the Federal Reserve grew louder Thursday, with a dovish voice joining the group.

John Williams, the San Francisco Fed president, indicated the $85 billion per month of bond purchases can be reduced soon, and that the whole program may be halted this year.

He pointed out the pace of job growth has picked up since the program was launched in September, with an average pace of job growth of 200,000 over the last six months.

“Assuming my economic forecast holds true and various labor-market indicators continue to register appreciable improvement in coming months, we could reduce somewhat the pace of our securities purchases, perhaps as early as this summer. Then, if all goes as hoped, we could end the purchase program sometime late this year,” said Williams in a speech in Portland, Ore.

While Williams doesn’t have a vote this year on the Federal Open Market Committee, he joins other Federal Reserve officials this week calling for a slowdown in the program.

But unlike Richard Fisher of the Dallas Fed and Charles Plosser of the Philadelphia Fed, Williams is decidedly in the so-called “dovish” camp.

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