2002 September 30 Monday
Fed Governors Disagree On Deflation

Federal Reserve Bank governors appear divided on whether the risk of deflation is substantial. Dallas Fed President McTeer would like to see more growth to pull us away from deflationary dangers:

"I do believe faster real growth is essential and consistent with a policy to combat deflation," McTeer told a conference of the National Association for Business Economics.

The rather less worried William McDonough is part of the majority on the Fed that voted not to cut rates further:

"It is very likely that the U.S. economy will do just fine," New York Federal Reserve Bank President William McDonough said, but if that turns out not to be the case, "We know what to do."

McTeer and Edward Gramlich were the only two Fed Governors who voted to cut rates further in their most recent meeting.

Share |      By Randall Parker at 2002 September 30 07:38 PM  Economics Political


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