Fed’s Fisher Says Government Spending to Help Boost US Economy

The Federal Reserve’s second-in-command was the latest to wade into a post-election debate over what policies the new U.S. government should pursue, saying on Monday spending and other efforts to boost sluggish productivity could help reduce the Fed’s burden of supporting the economy.

“Certain fiscal policies, particularly those that increase productivity, can increase the potential of the economy and help confront some of our longer-term economic challenges,” said Fed Vice Chair Stanley Fischer.

“Some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation all likely have a role to play in promoting faster growth of productivity and living standards,” he said at the Council on Foreign Relations.

Fischer’s remarks come nearly two weeks after Americans shocked pollsters by electing as president Republican Donald Trump, who campaigned on a platform of infrastructure spending, tax cuts, and renegotiated or canceled international trade pacts.

The economy, eight years after the worst of the recession, is now in “the vicinity” of the U.S. central bank’s employment and inflation goals, Fischer said, adding it was performing “reasonably well.”

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza