Cayman Net News
   Welcome to Cayman Net News Online: Today's print edition 
Search: web our site     



News from the Cayman Islands for
BUSINESS NEWS
Prev    Next

First stages of rebound underway

Published on Sunday, September 13, 2009 Email To Friend    Print Version

JACKSONVILLE, Florida (Reuters) - Atlanta Federal Reserve Bank President Dennis Lockhart said on Thursday the U.S. economic recovery has started and made a plea for central bank independence to assure global markets the U.S. will pursue responsible monetary policies.

“Overall, the U.S. economy is improving but still fragile,” Lockhart told the World Affairs Council of Jacksonville. “Stabilization is proceeding, and the first stages of recovery are under way.”

The Atlanta Fed president said the Fed – the U.S. central bank – has been able to respond aggressively to the financial crisis without raising inflation expectations because it has a reputation for independence from political influence.

He said that information disclosure requirements for the Fed should not go so far as to open the monetary policy process to short-term political considerations.

“I welcome further discussion on ways the Fed can be more accountable and transparent but always within the context of maintaining ... monetary policy independence,” he said.

Congress is considering a measure that would expose Fed actions to greater scrutiny.

Lockhart, a voter on the Fed’s policy-setting panel this year, said over the medium term he sees a slow recovery as financial markets heal and the economy adjusts to businesses holding leaner inventories and to more frugal consumers.

“Often a deep recession is followed by a sharp rebound in business and overall economic activity,” he said. “At least beyond the third quarter, I do not foresee this trajectory.”

Rising defaults and falling property values in commercial real estate pose a risk to the outlook, Lockhart warned.

Inflation should remain contained for some time, he said.

Fed officials have been cautiously optimistic in recent comments that the recession, which began in December 2007, may have ended. However, officials consistently warn they expect only sluggish growth accompanied by high unemployment in the months ahead.

The central bank has said it will keep benchmark interest rates, which are near zero, at an exceptionally low level for a long time to support the recovery. Even so, the Fed moved at its August meeting to phase out one of its emergency programs.

The Fed’s next policy-setting meeting is September 22-23.

 
Reads : 1478

Comments:

No comment for this topic yet. Be the first one to give comment.

Back...

Send us your comments!  

Send us your comments on this article for publication in our Readers' Forum or as a Letter to the Editor. All fields are required and in the interest of openness and transparency we will no longer accept anonymous submissions. We therefore request that all submissions include a name for publication, regardless of content. We will in special circumstances protect a writer's identity only after we have established good cause for anonymity, otherwise we will not be able to publish the submission.

For your contribution to reach us, you must (a) provide a valid e-mail address and (b) click on the validation link that will be sent to the e-mail address you provide.  If the address is not valid or you don't click on the validation link, it will be a waste of your time typing your submission because we will never see it!

Your Name:
Your Email: (Validation required)
Comments:
Enter Validation Code *


 
Click here for the latest print edition