— European Situation “Raises Clouds On the Horizon”
— No Signs Yet That European Situation Would Change Fed Exit Timetable
SEOUL (MNI) – Many observers may be surprised how quickly U.S.
employment recovers as there is “good reason to believe” jobs growth
will continue as the year progresses, Charles Plosser, president of the
Philadelphia Federal Reserve, said Monday.
“There’s good reason to believe over the course of this year we’ll
continue to improve on the employment front and see employment growth,”
Plosser said at a conference here sponsored by the Korean central bank.
“There’s uncertainty about how rapid that will be. I’m cautiously
optimistic. I expect many people will be surprised at how rapidly
employment will come back,” he said.
Asked about chances for a double-dip recession in the U.S., Plosser
said “the prospects for continuing growth in U.S. remain relatively
solid and broad based.
“I don’t anticipate at this point that the U.S. will see a double
dip,” he said.
But Plosser added that the European sovereign debt situation
“raises some clouds on the horizon that we have to be cautious about.”
Asked if the turmoil in Europe could delay rate hikes in the
U.S., he responded that “it’s true that things could happen that could
change the pace of the exit strategy but I don’t see them happening
yet.”
“How the crisis in Europe develops will dictate how we respond,” he
said.
Plosser said he sees the recent rise in the dollar as a flight to
safety and that “it’s not clear at this point if that increase in dollar
value relative to the euro will be a serious crimp to U.S. growth.”
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