Fed's Williams says monetary policy is still powerful

SALT LAKE CITY (Reuters) - U.S. monetary policy is no less powerful than it used to be, but it works in different ways than it used to because global economies are much more interdependent, a top Federal Reserve official said on Thursday.

"Monetary policy is still powerful. It's powerful in different ways. It's working mostly through capital markets domestically, and it is working internationally in powerful ways through the impact of the exchange rate," San Francisco Fed President John Williams said after giving a speech here. This is also one of the reasons the Fed has been talking more about foreign developments, he said.

As the Fed assesses the timing for its first rate hike, it will be watching for any "obvious signs" that risks related to slowing global growth have gotten worse, he said.

(Reporting by Ann Saphir; Editing by Chizu Nomiyama)

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