Fed's Poole backs Fed action if mkt slide hits economy
FRANKFURT, Nov 30 (Reuters) - William Poole, President of
the Federal Reserve Bank of St. Louis, said on Thursday he would
be in favour of the Federal Reserve taking action if a stock
market slide threatened to hurt the real economy.
Poole told reporters on the sidelines of a conference in
Frankfurt that the Federal Reserve had acted in 1998 in response
to market volatility and that he would be in favour of the Fed
taking action in future if circumstances required it.
The Federal Reserve cut interest rates in 1998 after stock
markets fell in the wake of an emerging markets crisis in Asia
and Russia.
"I would want to respond if it looked like financial market
events are feeding in to affect the real economy in an adverse
way," he said, stressing that he was voicing his personal
opinion and could not speak for the Federal Reserve.
Poole will be a voting member of the U.S. Fed's rate-setting
Federal Open Market Committee next year.
Poole also said that experience showed that energy price
increases tended to have a temporary effect on headline
inflation.
Asked whether the current slide in U.S. equity markets and
especially in the tech-rich Nasdaq, was threatening to force the
U.S. economy into a hard landing, Poole said it was the job of a
central bank to prevent market volatility from spilling over
into the real economy.
((Frankfurt Newsroom, +49 69 756525,
frankfurt.newsroom@reuters.com))
REUTERS
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