John Williams, president of the Federal Reserve Bank of San Francisco, said Sunday the presidential election wouldn’t prevent the central bank from raising interest rates later this year.
“We’ve proven over and over again that we can act in presidential election years,” Mr. Williams said on Fox News’ “Sunday Morning Futures with Maria Bartiromo.”
He added, “We’ve done that before, we’ll do it again.”
Fed officials raised short-term interest rates in December after holding them near zero since late 2008. Officials are currently considering whether to raise rates further over the course of this year. Mr. Williams has said that he favors raising rates two or three times this year.
Some observers of the central bank have speculated that the looming presidential election could cause the central bank to refrain from any further moves to avoid stoking controversy in an already heated election.
Mr. Williams disputed that this would influence the Fed’s thinking.
“We’re about as apolitical as you can imagine,” Mr. Williams said. Any decision to raise rates, he said, “would be based on the data, based on our analysis.”
He described the decision on the next rate increase as striking a balance between two forces. On the one hand, an improving U.S. economy would warrant somewhat higher interest rates. But the economy is also beset by uncertainties, he said, particularly international risks from economic weakness in Europe and Asia, and that cautions against raising rates too quickly.
History supports Mr. Williams’ assertion that the central bank will adjust policy even in presidential election years. The Fed raised rates during the election years of 1984, 1988, 2000 and 2004 and cut interest rates in 1992 and 2008. In 2012, the central bank launched the third round of its controversial bond buying program known as quantitative easing.
In the past 30 years, the 1996 election year is the only election during which the Fed made no major policy moves.
Mr. Williams said the central bank would consider moves even at meetings in September and October, less than two months before the general election.
Mr. Williams isn’t currently a voting member of the Federal Open Market Committee, but is considered to be an influential member of the committee. Fed Chairwoman Janet Yellen was previously San Francisco Fed President, and Mr. Williams was her research director.
Josh Zumbrun at Josh.Zumbrun@wsj.com