By Ann Saphir
SAN FRANCISCO (Reuters) - The U.S. economy is being lifted by tailwinds, including the recent U.S. tax cuts, growth in the global economy, and financial conditions, San Francisco Federal Reserve Bank President John Williams said on Friday.
"In the U.S. we are now in a situation where the economy is actually doing well," Williams told the Bay Area Council Economic Institute, after years when the economy was being battered by headwinds. "We are gradually trying to get monetary policy back to a neutral setting" by raising rates gradually, he said.
Williams is under consideration by the White House for the No. 2 spot at the Washington-based Fed Board under incoming Fed Chair Jerome Powell, the Wall Street Journal and the Financial Times reported this week.
The position would give increased influence on U.S. monetary policymaking to Williams, a disciple of current Fed Chair Janet Yellen who ran the San Francisco Fed before she took the Fed Vice Chair job in 2010 and handed the reins at the regional Fed bank to Williams. Williams said Friday that Powell would deliver "continuity" at the Fed, which he said is generally an institution uncomfortable with change.
Williams forecast the U.S. economy to grow at about 2.25 percent to 2.5 percent, fast enough to push the U.S. unemployment rate, now at 4.1 percent, to about 3.7 percent by the end of the year. He also said he expects inflation to rise to the Fed's 2-percent goal over the next two years.
(Reporting by Ann Saphir; Editing by Chizu Nomiyama)