Saturday 22nd October, 2011
Fed Reserve exec urges further economic stimulation
The US Federal Reserve has been looking at ways to stimulate the economy further. Worried about US economic health, the central bank’s vice chair, Janet Yellen, has said all Fed tools will be used "to foster a stronger economic recovery in a context of price stability."
Speaking at a financial industry conference, she said the central bank had been exploring many options for easing monetary policy, including the buying of bonds. She said bond markets had again hinted there may be a rising risk of deflation.
Ms Yellen also warned that Europe’s financial crisis might spill over into the United States, possibly by forcing local banks to tighten their credit restrictions during a time of recovery.
She urged legislators not to tighten the US budget too quickly, since this could also risk stifling growth expansion. Ms Yellen argued inflation should not be seen as an immediate concern, saying that there were more likely to be risks that disinflationary forces might rear up.