As Market Falls,Fed Banker Explains China Slowdown,US Prospects-plus how many rate hikes in 2016

A slowdown in Chinese manufacturing in December,coupled with fears of intensifying conflict between Iran and Saudi Arabia,left global markets in a tailspin Monday.The Caixin/Markit China Manufacturing PMI fell to 48.2 in December from November's 48.6,the 10th straight monthly decline.A reading below 50 indicates contraction of the sector.The Reuters consensus estimate for December was 49.0.In response to the China index and the exogenous event in the Middle East,the S&P 500 Index fell 31.28,or 1.53%.Opinions on Wall Street were split over how significant the slippage was for the 2016 outlook.*
For San Francisco Federal Reserve Bank President John Williams,who spoke to CNBC at the American Economic Association annual conference,it's important to realise China is undergoing a pivot to slower growth,and a pivot away from manufacturing to the consumer sector.I think this is an ongoing process that China is going through,Mr.Williams said.We realise we're in a global economy and we're affected by it.The Chinese stock market is not a major concern as far as systemic risk right now.What we need to do is,focus on maximum employment and price stability.We're focused on the attainment of our objectives.*
We're in very good shape.Unemployment is at 5% and GDP growth is a little over 2%.We're a little ahead of the pack in getting back to full employment and on a sustainable path.Where we're being hit hard is on our net exports,a significant part of our economy.Inflation is one thing we're still struggling to get up to our goal of 2%.We're on a pace to add continued job gains.That's very positive for the economy-a growth path of 2-2.5 GDP and unemployment edging back down to 5%.*
There are always unforeseen events:the dollar,oil prices.I have a medium-term outlook.I want to focus on what's happening over the next 2-5 years.I'm not concerned about the ups and downs of market moves.We have a capitalist system and that's what happens.We're on a growth course that would lead to 3-5 Fed rate hikes in 2016,Mr.Williams projected.