Kansas City fed reserve president George’s comments are hitting the wires:
- US employment picture getting better
- Housing recovery gaining momentum
- Fiscal policy producing headwind to US economy but he expects the impact to be felt mainly in 2nd and 3rd quarters this year and then fade
- Expects US growth to continue around 2% this year
- Yet to see any obvious impact on real economy from higher equity prices, may take some time
- Hopes that there will be an opportunity to reduce the level of Fed bond buying going forward
- Fed will face a challenge in communicating its exit in fashion that does not produce sharp increaes in market rates
- Must look carefully at capital levels in large banks, dont wait for next crisis to tackle this issue
Esther George is a voting member of the FOMC.
