Is da jemand nervös bei der FED?

verfasst von Popeye, 13.11.2002, 05:53

-->Fed Officials Seek to Dispel Jitters
Last Updated: November 12, 2002 04:26 PM ET
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By Glenn Somerville

WASHINGTON (Reuters) - Federal Reserve officials on
Tuesday played down worries about the future of the U.S.
economy after last week's unexpectedly steep interest rate cut,
setting an upbeat tone economists expect Fed Chairman Alan
Greenspan to echo on Wednesday.

In audience questioning after an address to an economic and
investment conference in Pittsburgh, Fed Vice Chairman Roger
Ferguson said:"I remain optimistic that our aggressive policy
will reignite a recovery that has showed signs of stalling."

Nor, Ferguson said, is the U.S. central bank in danger of
running out of room to cut short-term interest rates, even after
last week's dramatic half-percentage point reduction -- twice
the size that was expected by financial markets.

"The current environment of low inflation and concerns about
the recovery have raised questions about whether the Federal
Reserve will eventually run out of room to lower interest rates
enough to stimulate the economy," he said.

"However, I do not think that macroeconomic outcomes will be
sufficiently adverse to place us in imminent danger of hitting the
so-called zero bound on nominal interest rates," Ferguson
added.

FORESHADOWS GREENSPAN TESTIMONY

Economists said the vice chairman's words, coupled with
Minneapolis Fed President Gary Stern's assurances that the
economic recovery is clearly underway, are likely a good
gauge of the prognosis Greenspan will offer on Wednesday in
closely watched testimony before Congress's Joint Economic
Committee.

"Mr. Ferguson's comments, along with Mr. Stern's,
acknowledge what the FOMC (Federal Open Market
Committee) statement said last week -- that additional monetary
easing should prove helpful as the economy works through its
current soft spot and by taking rates down lower than the
markets had expected, there's a better chance of assuring
yourself a continued expansion...I think that's the general upbeat
tone that Mr. Greenspan will take," said Joseph LaVorgna,
senior economist at Deutsche Bank Securities in New York.

The campaign to talk up the economy also was carried on by
top Bush administration officials including Treasury Secretary
Paul O'Neill, who said while being interviewed at an economic
forum that he found an unwarranted"cloud or mood" of doubt
around the country about future prospects.

"At least for me, when I get beyond the headlines and emotional
stuff and begin looking at the facts I don't find a basis for
pessimism, in the sense that people are expecting somehow our
economy is going to fall off the cliff and go back into a zero rate
of real growth," O'Neill said.

The Fed cut its benchmark fed funds rate to a new four-decade
low of 1.25 percent last week, the 12th cut in less than two
years and the first in 2002.

At that time, it said it thought the latest drop in borrowing costs
would help the economy through its"soft spot" and did away
with a warning that weakness posed the greatest economic
threat -- a move that has puzzled some economists.

The reduction of key rates below the rate of inflation, by some
measures, has raised concern that the Fed may be running out of
rate cut ammunition, a worry Ferguson dismissed.

"NOT TERRIBLE"

The Minneapolis Fed's Stern said there is no question the U.S.
economic recovery is underway and that current monetary
policy is stimulative. He said economic expansion from the
fourth quarter of 2001 through the first three quarters of this
year has averaged an annual growth rate of roughly 3 percent.

"That is not magnificent for the early stages of an economic
expansion, but it is not terrible either, so the economy does
appear to be moving ahead. In my judgement there is no
question that an economic expansion, an economic recovery, is
underway," Stern, currently a voting member of the Fed's policy
committee, told an economic summit in La Crosse, Wis.

Fed Governor Susan Schmidt Bies, speaking to the
Canadian-American Business Council, said business investment
was"tepid at best" now but could be due for a bounce.

"Business inventories currently seem lean in many industries,
so there may be considerable scope for a pickup in inventory
investment as the economy recovers," she said.

Greenspan stayed off the subject of the U.S. economy at the
Banco de Mexico Second International Conference on
Macroeconomic Stability, Financial Markets and Economic
Development, instead warning against countries loading up
with foreign-currency denominated debt.

"Periodically, as an economy borrows its way to the edge of
insolvency with debt denominated in foreign currency,
government debt-raising capacity appears to vanish virtually
overnight," Greenspan said.

Though the Fed chief did not single out any country, prior to its
default in January, Argentina had nearly 97 percent of its debt
in foreign currency. A delegation from crisis-hit Argentina is in
Washington, seeking aid from the International Monetary Fund
to avoid default on its World Bank debts.

DEFLATION NOT A RISK

Ferguson also discounted another concern of some analysts, that
the United States may be vulnerable to deflation, a widespread
decline in prices, saying the risk is"remote."

He said economics literature advises"preemptive and
aggressive" action to minimize deflation risks. Should deflation
emerge, Ferguson said,"I believe that the Federal Reserve
would demonstrate a commitment to such timely and decisive
action."

Ferguson dismissed concerns that Fed policy was losing its
punch, noting that interest-rate cuts have always worked, albeit
with long and variable lags.

Another voting member of the Fed's policy-setting FOMC,
Philadelphia Fed President Anthony Santomero, also
pooh-poohed the idea that the U.S. central bank was diluting its
stimulative punch.

"I am not concerned," Santomero said in a conference with
reporters."I think our job is to determine appropriate policy for
the moment. We have demonstrated with the mildness of this
recession that counter-cyclical policy is effective."

Both Ferguson and Santomero said the half percentage point
move was designed as a decisive action, to punctuate
policymakers' determination rather than any sign of panic.

"In this light, given the severity of the shocks that have hit the
economy, a better interpretation may well be that recent events
validate once again the potency of monetary policy," Ferguson
said.

Quelle: Reuters US

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• Is da jemand nervös bei der FED? - Popeye, 13.11.2002, 05:53