Fed’s Lacker: Uncertainty Holding Back Economy
fxbom.com
11:31 AM
SALISBURY, Md. -(Dow Jones)- Federal Reserve Bank of Richmond President Jeffrey Lacker Monday said it is likely to take “some time” to settle uncertainty over regulations, taxes and other policies that are holding back the economy.
“I think it’s going to take time to achieve greater clarity on regulatory and tax policy. And I think that the sooner we settle on a sustainable trajectory for the federal fiscal account the better,” Lacker told reporters following an economic development forum on Maryland’s Eastern Shore.
Still the Richmond Fed president sees the chance of another economic downturn as remote. And recent data appear to confirm a path of moderate growth, Lacker said.
Even if the situation were to worsen, there is little scope for the Fed to boost the economy, he said.
“My sense is that we should not be adding monetary stimulus at this point. I think a case could be made that withdrawing stimulus may be warranted soon. I haven’t decided,” Lacker said.
Outside the U.S., Lacker said turmoil in Europe reflects a lack of clarity on policies that governments will use to support troubled countries, banks and creditors.
“I think what’s happening in Europe is demonstrating the costs of ambiguous discretionary bailout policy,” Lacker said.
-By Jeffrey Sparshott; Dow Jones Newswires; 202-862-9291 ; jeffrey.sparshott@dowjones.com
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