Tags: Fed | Pianalto | Economy | rates

Fed's Pianalto: Economy Will Stagger for Years

Thursday, 25 Mar 2010 10:22 AM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
A bumpy U.S. recovery and subdued inflation warrant the central bank's promise to keep benchmark interest rates low for an extended period, a senior Federal Reserve official said on Thursday.

"Despite early signs of recovery, the economy is still facing some significant headwinds that will limit the rate of growth we can expect for the next couple of years," Cleveland Federal Reserve Bank President Sandra Pianalto told the Bonita Springs, Fla., Chamber of Commerce.

She said two major headwinds facing the U.S. economy are prolonged unemployment and a heightened sense of caution among consumers and businesses.

Pianalto said that that caution is "driven by a deep uncertainty about the direction of the economy and where the 'new normal' or baseline might be."

The U.S. central bank cut interest rates to near zero in December 2008 and has kept them there since to support the U.S. economic recovery.

The Fed also took a number of extraordinary measures, such as buying $1.25 trillion of mortgage-backed securities, to further combat the financial crisis and unlock credit markets.

Pianalto, who is a voting member this year on the U.S. central bank's policy-setting panel, said that given this backdrop, timing the Fed's eventual tightening of monetary policy will be more complicated this time.

"The unprecedented actions we took to cope with the crisis have created conditions that make it harder to simply put the process in reverse," she said.

She said it was crucial for the Fed to communicate clearly to ensure that it doesn't add more uncertainty to the mix.

© 2014 Thomson/Reuters. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Obama Touts $15M Solar Power Plan to Fight Climate Change

Friday, 18 Apr 2014 08:52 AM

The Obama administration has a launched a $15 million solar energy package in its battle to combat climate change.  . . .

Racist Online Forums Linked to US Hate Crime Spree

Friday, 18 Apr 2014 08:50 AM

A white supremacist charged with killing three people near two Jewish community facilities in suburban Kansas City this  . . .

Pentagon Official Blasts F-35 Engine Cost

Friday, 18 Apr 2014 08:16 AM

A senior Pentagon official has criticized Pratt Whitney on the over-budget and long-delayed F-35 Joint Strike Fighter  . . .

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved