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
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Arrest Made in Attempted Bombing of Rep. Cleaver's Office

Thursday, 18 Sep 2014 19:44 PM

Authorities in Kansas City, Mo. have charged a man after he allegedly threw molotov cocktails at Rep. Emanuel Cleaver's  . . .

Doctor: Global Response to Ebola Underway, but US Must Lead

Thursday, 18 Sep 2014 18:34 PM

Doctors and medical missionaries from around the world are already at work in west African countries besieged by Ebola,  . . .

Chuck Todd's 'Meet The Press' Sags in Ratings After Initial Spike

Thursday, 18 Sep 2014 17:51 PM

Chuck Todd's highly successful premier on NBC "Meet the Press" with President Barack Obama as the featured guest garnere . . .

Most Commented

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