Monday, March 05, 2007

Fed Officials Reiterate Confidence in U.S. Economy, Markets

From Bloomberg Financial News:

March 5 (Bloomberg) -- Federal Reserve officials reiterated the U.S. central bank's confidence in the economic outlook today and played down last week's decline in share prices.

The three officials, who all vote on interest rates this year, reinforced Chairman Ben S. Bernanke's message at a Feb. 28 congressional hearing that there's a ``reasonable possibility'' growth will pick up later this year.

....The Fed's expectations for growth have ``not materially changed,'' Fed Governor Randall Kroszner said in Washington. Governor Kevin Warsh said ``the U.S. economy continues to demonstrate extraordinary resilience, no doubt supported by the ability of financial markets to absorb substantial shocks.''

St. Louis Fed President William Poole said history may prove that last week's slump was ``hardly a wiggle in the value of equities.'' He added that financial markets indicate that investors, like the Fed, don't anticipate a recession.........

....``We do not see a recession on the horizon,'' Poole said to the Global Interdependence Center Abroad in Chile conference in Santiago, Chile today. He said the current slump in the housing industry has yet to affect the broader economy. ``We have seen little fallout from the end of the housing boom,'' he said. ....

By Steve Matthews and Anthony Massucci

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