ATLANTA (Reuters) - Atlanta Federal Reserve Bank President Dennis Lockhart said slowing U.S. economic growth, a stagnating labor market, and a conviction that monetary policy could boost jobs were what convinced him to throw his weight behind the central bank's latest stimulus.
In the leadup to last week's Federal Open Market Committee's policy meeting, Lockhart had said he undecided on whether more easing was needed.
"I concluded that there was indeed a call to action falling out of the discouraging conditions of slowing growth and still high unemployment with meager recent progress in bringing it down," Lockhart told the Institute of Internal Auditors on Friday.
Although there is still a debate raging over whether the root problems in the jobs market are beyond the power of the Fed to affect, he said, "I have been persuaded that the problem is, to a significant enough extent, one of weak growth that can be ameliorated by prudent monetary policy actions."
The Fed last week embarked on a bold new effort to help the economy, buying $40 billion of mortgage backed securities each month and not letting up on asset purchases until the labor market improves substantially.
It also said it will keep rates low for a considerable period after the economy strengthens, much like - in the words of New York Fed Bank President William Dudley - continuing to push a stalled car to make sure its momentum sticks even after it has been freed from the mud.
And depending on conditions, the Fed could still do more, Lockhart said on Friday.
"Further policy actions, possibly in the form of additional asset purchases, will be decided on the basis of the extent of improvement in the outlook for labor market conditions over the coming months," he said, citing comments by Fed Chairman Ben Bernanke last week. "As always, the outlook for inflation will also be a critical consideration."
The Fed's decision to buy mortgage-backed securities in its latest round of stimulus, known as quantitative easing, was well-timed because the housing market has begun to improve, reducing one headwind to economic growth, he said.
If U.S. lawmakers effectively deal with the so-called fiscal cliff - the raft of tax increases and spending decreases slated to go into effect at the end of this year-- and if Europe's debt crisis abates, two more headwinds will also be softened, he said.
Still, he said, monetary policy has its limits.
"I am not expecting miracles," he said.
(Reporting by Ann Saphir; Editing by Neil Stempleman)
Source: http://news.yahoo.com/feds-lockhart-says-slowing-progress-jobs-call-action-163814185--business.html
barkley beltran space ball jim mora the weeknd echoes of silence gio gonzalez san francisco fire
No comments:
Post a Comment