Fed official supports monetary accommodation into second half
(02-26 12:03)
As the Federal Reserve Chairman Ben Bernanke prepares to testify to the US Senate Banking Committee (later today HK time), a senior central bank official has said he favors further bond purchases.
Federal Reserve Bank of Atlanta President Dennis Lockhart said the Fed should continue asset purchases at least into the second half of the year to help stimulate economic growth.
“As the minutes of the last two Federal Open Market Committee minutes indicate, policymakers are engaged in discussions of the extent and duration of the quantitative easing program. Considering current labor market conditions, I think continuing the asset purchase program to support the recovery and to improve employment conditions remains appropriate for now. And given the outlook and associated risks, I am comfortable with sticking with the current approach at least into the second half of the year. All things considered, I do not think that monetary policy has yet crossed the line where the benefits of the current policy—specifically the quantitative easing element—are swamped by serious concerns over problems the policy might be creating for the longer term,’’ he said in a speech to the University of Tennessee, Knoxville, Tennessee. The speech was posted online.
He also said the economy could grow about 2 percent in the first quarter and 2 percent and 2.5 percent this year.
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