The U.S. economic recovery does not need an additional boost from the Federal Reserve now and will not need one if it continues along the track expected by policymakers, a top Fed official said on Tuesday.
"If inflation fell in a material way that suggested a risk of sustained declines in the price level, I would be willing to seriously consider further quantitative easing," Richmond Federal Reserve President Jeffrey Lacker said in an interview with The Wall Street Journal.
"But we seem fairly far from that threshold right now," he added.
The Federal Reserve is expected to tread water at a policy-setting meeting next Tuesday with a renewed promise to keep its portfolio from shrinking but no new steps to ease monetary policy.
Lacker said that if growth continues at the pace envisioned by forecasters — and if inflation stays between 1 and 2 percent — there would be no need for the Fed to take measures such as buying additional securities to spur more robust growth.
"The economy is facing very real impediments to growth and there is little monetary policy can do about that," he said. "So I think our expectations for real growth and for the rate at which unemployment comes down ought to be very modest right now."
Lacker, one of the most vigilant, anti-inflation hawks among top Fed officials, said his growth forecast for 2011 is about 3 percent, adding his growth outlook has not changed much since the Fed's August meeting.
"We've had some good observations, a couple of good reports," he said. "But it is still a slowly-growing economy and it looks like growth is going to be slow for some time to come."
Lacker is not a voting member of the Fed's policy-setting panel this year.
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