KANSAS CITY, Mo. — The new president of the Kansas City Federal Reserve Bank said Tuesday that steps the central bank has taken on the U.S. economy need time to play out before further action is taken.
In a question-and-answer session after her first speech as the regional bank’s top official, Esther George said she wants to see the effects of the Fed’s actions to date in trying to stimulate the U.S. economy. Still, the central banker said the Fed needs to look past just interest rates when addressing growth.
“The actions we’ve taken will have some time to play out, and we’ll have to see how the data continues to come in to make a decision on whether any further action is appropriate,” George said.
George’s speech in downtown Kansas City, Mo., was her first since succeeding Thomas Hoenig in the late fall. Hoenig frequently was the lone dissenter among U.S. central bankers, arguing that keeping interest rates low would encourage too much risk-taking.
George views the U.S. economy as continuing to go through a deleveraging process and said trying to speed that up carries risk. Consumer debt is one area holding back economic growth, she said.
As for fiscal policy, George said now is the time to begin addressing U.S. debt levels, noting she considers a proposal put forward by President Barack Obama’s bipartisan deficit-reduction commission — led by Erskine Bowles and Alan Simpson — a strong plan.
