HONOLULU, Hawaii (Reuters) - Higher oil prices are affecting U.S. growth but are currently not a reason to think the economy will stall, a top Federal Reserve official said on Thursday.
“It pushes people not to spend. This is one of the factors affecting consumer confidence and consumer spending,” John Williams, president of the San Francisco Federal Reserve Bank, said in a question-and-answer session after a speech in Honolulu.
“Given where oil prices have gone, it’s part of the story for (expectations of) modest growth.”
However, a severe supply shock in the Middle East would have a more negative impact if it sent prices sharply higher, he said.
Williams, a voting member this year on the Fed’s policy-setting panel, has supported recent moves by the U.S. central bank to bolster what he has termed as a “lackluster” economic recovery.
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Writing by Kim Coghill; Editing by Ramya Venugopal