Tags: Fed | Lacker | Growth | Easing

Fed's Lacker: Growth Diminishes Need for Easing

Friday, 30 March 2012 10:19 AM EDT

A top Federal Reserve official on Friday said it would be difficult to argue for more monetary policy easing if U.S. economic growth is between 2 and 3 percent this year, as he predicts.

"If we get growth about what I'm expecting, about what a lot of people are expecting ... I don't see where the rationale for further easing is going to come from," Richmond Fed President Jeffrey Lacker said on CNBC television, adding the country could see 3 percent growth in 2013.

In January, the U.S. central bank forecast GDP growth of 2.2 to 2.7 percent for this year, down from a previous forecast of 2.5 to 2.9 percent. For 2013, it forecast growth of 2.8 to 3.2 percent.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

Another Fed policy meeting is set for April. There is speculation the central bank could embark on another round of large-scale asset purchases then or in June, making its already easy-money stance that much easier to help the U.S. recovery.

Lacker, the lone dissenter from Fed's last two policy statements, said there is a "good chance" the unemployment rate will fall from 8.3 percent currently to below 8 percent by next year.

Lacker added that he was cautious about the improving labor market. "You have to keep in mind the possibility that things could slow down a bit, but I've been heartened by the recent numbers."

Philadelphia Fed President Charles Plosser, who like Lacker is known as a policy hawk, expects the jobless rate to fall below 8 percent this year. He told Nightly Business Report it will take another two to three years for the rate to dip below 6 percent.

"It may be 6 percent is the new full employment rate going forward, but that may take another couple of years," said Plosser, according to a transcript of the interview.

Lacker, turning to inflation, said the country is in "reasonably good shape" despite the rise in oil prices.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

 

© 2025 Thomson/Reuters. All rights reserved.


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Friday, 30 March 2012 10:19 AM
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