Economics
Fed’s Fischer Warns of Risk to Running Too High-Pressure Economy
- Overshooting employment goal proved dangerous in past
- Fed vice chair sketches limits to strategy outlined by Yellen
Fed's Fischer: Operating Near Zero Rate Raises Concerns
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Federal Reserve Vice Chairman Stanley Fischer sees limits to how far the U.S. central bank can pursue a strategy to push unemployment ever lower, an approach characterized as seeking a high-pressure economy by his boss, Janet Yellen, in a speech last week.
“If you go below the full employment rate, or peoples’ estimates of full employment, by a couple of tenths of percentage points, I don’t think there’s any danger in that,” Fischer said Monday in response to questions at an Economic Club of New York lunch. “But saying we should keep going until the inflation rate shows us we’re wrong, then you’re going to change too late.”