Dow Jones
The steep drop in new United States home sales in July is not necessarily an indication that the housing recovery is slowing, said John Williams, president of the San Francisco Federal Reserve Bank, in an interview with Bloomberg TV on the sidelines of the Fed's annual meeting at Jackson Hole, Wyo.
"I think the housing recovery is on a good track and continuing," Mr Williams said, noting on the West Coast there has been at least a "really good improvement" in the housing market.
I wouldn't want "to over react" to one month of data, he said.
Friday, the Commerce Department reported July new-home sales fell by 13.4 per cent from June to an annual pace of 394,000, the steepest drop in three years.
About the recent rise in rates after talk of the Fed's tapering began in May, Mr Williams said it was a part of the Fed's calculation but more generally was a reflection of an improving economy and that "we are moving closer, gradually over time, to a more normal economy which is a good sign."
When asked about prospects for the Fed to begin tapering its asset purchases at either the September or subsequent meetings, he said it should be driven entirely by the data and economic forecasts.
"I'm going to go into the meetings with an open mind," he said, adding he thought Fed chairman Ben Bernanke's plan laid out in June was a good plan and still on track.
Mr Williams is not currently a voting member of the Fed's monetary-policy-setting committee.