Believes the economic recovery will be sustainable as stimulus winds down. As the US economy comes out of the recession it is doing so with moderate growth and low inflation. Full economic recovery in the financial markets will take time. He expects economic growth to be between 3 and 3.5 % over the next 2 years. On interest rates the Fed will need to raise rates as the economy improves. On house prices the market seems to have stabilized but there could be some risk in the Commercial Real Estate market. On the jobless rate he believes it will begin to decline by the end of 2010 but an uptick will occur before that.
Dollar gets a boost from his comments trading at 1.4467 against the Euro and higher at 91.25 against the Yen and close to 1.02 against the Swiss. Plosser is known for his hawkish comments on the economy.
