NEW YORK - The US economy is on "sound footing," a hawkish Federal Reserve official said on Monday in a speech that cautioned against asking the central bank to solve problems beyond its control such as low productivity growth.
Cleveland Fed President Loretta Mester, at a forum in Singapore, did not comment specifically on interest rates. However she has dissented in the past in favour of quicker rate hikes and on Monday urged the Fed to focus on returning to a more normal policy footing, including trimming its $4.5-trillion bond portfolio.
The Fed has raised rates twice in two years and expects to pick up the pace of tightening this year as unemployment, at 4.8 percent, has fallen to near an equilibrium level and as the Republican-controlled White House and Congress are expected to provide fiscal stimulus.
The US economy is "now on sound footing," Mester, who does not vote on monetary policy until next year, said in prepared remarks to The Global Interdependence Center.
However, she said, "am very doubtful that monetary policy could be targeted to spur a strong pickup in the types of investment in human capital and physical capital that would raise productivity growth."
Years of disappointing productivity growth has stymied the Fed's expectations that the US economy would grow sustainably quicker than its roughly 2-percent rate.
Turning to the balance sheet, which the Fed quadrupled in the wake of the financial crisis to spur investment and hiring, Mester reiterated the central bank expected to shed its mortgage-backed bonds and return to an all-Treasuries portfolio.
"The return to primarily Treasuries will take some time, but it will be welcome because ... it may help guard against future calls for the Federal Reserve to enter into the realm of fiscal policy," she said. -Reuters
About 92 News HD Live Main TV Channel of Pakistan:
92 News (also known as 92 News HD Plus (Channel 92) is a conservative Urdu language TV channel based in Lahore, Pakistan.
Mian Muhammad Hanif is the chairman of the channel.
This TV channel is a subsidiary of Madinah Group under Galaxy Media Group.
The channel's name, 92, is to celebrate the 1992 Cricket World Cup won by Pakistan. The number 92 is also the telephone country calling code of Pakistan, which is another major reason behind the channel's name.
92 News HD is Pakistan’s first HD Plus News Channel. Aims to bring credible & responsible News & important stories from Pakistan & around the World
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