Fed's Pianalto: Economy showing cyclical weakness - MarketWatch
The U.S. economy is being held down by lack of demand and not structural
factors, said Sandra Pianalto, the president of the Cleveland Federal
Reserve Bank, on Thursday. "My current assessment is that the real
economy continues to show considerable cyclical weakness. This
assessment, along with my outlook for moderate growth and subdued
inflation, calls for today's highly accommodative monetary policy,"
Pianalto said in a speech at a conference sponsored by the National
Association of Business Economics in Cleveland. Pianalto forecast growth
slightly above a 2.5% rate this year and around 3.0% in 2013 and 2014.
"At this pace of growth, I expect that it could take as long as four to
five years for the unemployment rate to fall to the 6% rate," Pianalto
said. Inflation should run very close to the Fed's target of 2% through
2014, she added.
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