Fed's Williams: Easing might help threat of stall (by Greg Robb)

WASHINGTON (MarketWatch) - Further Federal Reserve easing might help the economy that is at risk of stalling, said John Williams, the president of the San Francisco Fed, on Wednesday. "Right now...the real threat is an economy that is at risk of stalling and the prospect of very high unemployment," Williams said in a speech prepared for delivery to the Rotary Club of Seattle. Williams said the Fed "took a step" towards easing in August by saying the central bank is likely to keep the federal fund rate near zero through mid-2013. Further steps won't make the country's problems go away, and the costs and benefits must be carefully balanced, he said. Referring to the economy as a patient, Williams said further easing "could offer a measure of protection against further deterioration in the patient's condition and perhaps help him get back on his feet," said Williams, who becomes a voting member in 2014. He said he was not forecasting another recession, saying the economy would grow around 2% in the second half of the year and strengthen further next year. Inflation is expected to drift lower, he said.