Che stress ... immagino possa essere legato anche al discorso GM che ha spread in allargamento da paura, inoltre debolezza dell'equity prima degli earnings ... che orchite .....
Santomero says Fed must be vigilant on inflation
Mon Apr 11, 2005 11:12 AM ET
NEW YORK, April 11 (Reuters) - The U.S. economy is growing at a good pace without undue price pressure but the Federal Reserve must remain vigilant on inflation as the economy expands, the head of a regional Fed bank said on Monday.
In an interview with USA Today, Philadelphia Fed President Anthony Santomero said the economy was "in good shape and growing at a good pace, not too fast so as to create all these imbalances and pressure on prices, but clearly moving slightly above trend."
But he said the Fed must take care not to allow inflationary pressures to take hold as the economy expands.
"We have to be vigilant about inflation and in so doing, allow the economy to go through an extended expansion without finding ourselves trying to react to higher inflation," he said, adding that inflation was harder to stop than to prevent.
Santomero's comments to the newspaper were largely a reprise of his remarks in recent weeks.
The Fed has raised interest rates seven times since last June in quarter-point increments. Its benchmark fed funds rate is now 2.75 percent.
Asked whether the Fed could continue raising rates at a "measured pace" or would need to become more aggressive, Santomero said that the notion of a measured pace of interest rate rises was conditional on how the economy evolved.
"We are looking at an economy that, to the extent that it continues to move in the direction at the speed we think and most forecasters believe is the case, we can continue to move as we have. But we are prepared to do what is necessary either way to respond to incoming data," he said.
Santomero also said U.S. consumers' debt burdens were "not problematical at this level for the broad general public."
He said U.S. growth would be hurt if the price of oil "spikes way beyond where it is now." But if oil prices remain near current ranges, "the output of the U.S. economy is secure and growth is most likely."
U.S. crude oil was trading at $52.50 on Monday.
Regarding the wide U.S. current account gap, Santomero said he would prefer it was rectified by growth in the economies of U.S. trade partners, which would increase demand for American goods.
"This is a long-term imbalance and it is not going to get rectified immediately," he said.