Sustained inflation drop would prompt later Fed rate rise - San Francisco Fed President

WASHINGTON4 (Reuters) - The Federal Reserve would consider delaying an interest rate hike if inflation started to sustainably drop away from the U.S. central bank's 2 per cent goal, San Francisco Fed President John Williams said in an interview on Tuesday.

"If I saw a sustained reduction in the trend path of inflation, and wage growth is part of that, then clearly that would argue ... to do more accommodative monetary policy than otherwise," Williams told Reuters Insider TV. "That means later liftoff for the (Fed) funds rate ... and potentially a more gradual path for the funds rate, would be my first reaction," he said.