In a resounding endorsement of the Federal Open Market Committee moves earlier this month, San Francisco Federal Reserve Bank President John C. Williams said "they represent the best course to move us closer to" full employment, price stability and moderate interest rates.

While much discussion has focused on the high unemployment rate, "as it should," the Fed is watching inflation and is committed to price stability, Williams told the City Club of San Francisco, according to prepared text released by the Fed..

While monetary policy can't solve all the economy's ills, he said, "it can help speed the pace of recovery and get our country back on track sooner."

While the two percentage point decline in the unemployment rate is "real progress," the economy has "quite a way to go" to reach a healthy level, he said.

Williams expects 1.75% real gross domestic product growth this year, 2.5% next year and 3.25% in 2014, while employment slides to 7.25% by the end of 2014, and inflation under 2%.

"Of course, my projections, like any forecast, may turn out to be wrong," he said. That's something we kept in mind when we designed our new policy measures. Specifically, an important new element is that our recently announced purchase program is intended to be flexible and adjust to changing circumstances."

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