Former Fed Chief Thinks 3% Growth Possible but Not Likely

May 1, 2017 Share Print 0

The U.S. economy is doing well but not so much to meet the ambitious growth expectations of President Donald Trump, former Federal Reserve Chairman Ben Bernanke said Monday.

Asking if he thought growth could hit 3 percent or better, the former two-term central bank leader told CNBC, “On a sustained basis, it’s certainly possible, but not likely.”

Should Congress pass a tax cut, as Trump has proposed, “You might have a bump because of the increased consumer spending,” he said on “Squawk Box.”

However, if he were to bet on whether the economy would break the 3 percent barrier, Bernanke said, “I would take the under on that.”

Bernanke ran the Fed during the financial crisis that exploded in 2008. He is credited with devising some of the programs that brought the U.S. economy back from the brink.

However, he also has faced criticism for advocating low rates that helped fuel risk-taking, and famously doubted whether problems with mortgages given to less-than-qualified buyers would be a problem for the economy. The collapse of subprime mortgages fueled the crisis and the accompanying Great Recession.

via CNBC

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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 has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. 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.