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7/17, 8:31 PM (Source: TeleTrader)
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Fed's George sees growth staying near trend

The shift lower in gear in the global economic engine is "a prominent risk" clouding the perspective in the United States, according to Esther George, who heads the Federal Reserve System's subsidiary in Kansas City. However, she insisted domestic indicators are "largely in a good place" even though other central bankers have largely backed away from the assessment they supported in the first half of the year. The growth rate is likely to remain around the trend line as the outlook is underpinned by the latest macro data, the policymaker stressed.

She acknowledged the shift and strengthening of risks to the downside and highlighted trade tensions but also revealed her projections haven't changed. This year's voting member on the Federal Open Market Committee still expressed readiness to change the view regarding monetary policy in case some of the risks materialize. For now it is "in a good range," in the view of the relatively hawkish rate-setter.

George asserted the drop in unemployment is currently failing to spur inflation and suggested the natural level could be declining. She turned to the issue of national debt and warned markets could sour past a critical point in government borrowing.

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