Chicago Fed's Moskow Sees No Recession
CHICAGO (Reuters) - U.S. economic growth is slowing, but the economy is not heading toward a recession, the
president of the Federal Reserve Bank of Chicago said in a newspaper interview this weekend, reiterating a view he has
previously expressed.
Chicago Fed President Michael Moskow declined to say whether the Fed will cut interest rates, the Chicago
Sun-Times said in its Sunday editions.
The Fed's interest-rate setting body, the Federal Open Market Committee, warned on Dec. 19 that the economy was
slowing so fast that there was a risk of a sharp downturn, a signal the central bank was preparing to cut rates soon.
Moskow will be a voting member on the FOMC in 2001.
``I can tell you that we will be monitoring very carefully all the various indicators (of economic performance) ... and
gathering a host of anecdotal information as well,'' Moskow told the Sun-Times. ``And we'll be prepared to do what's
best for the American people.''
Moskow noted that the housing market has stayed ``at a very high level,'' while businesses can still borrow and spend
money, despite higher interest rates. Also, despite layoffs announced by many companies in recent months, those
workers can still be absorbed into other jobs, he said.
``We may see a certain number of layoffs that get a lot of publicity,'' Moskow said. ``But if the economy is still
expanding and total jobs (created) are still going up, say 100,000 to 200,000 a month, then those people are being
absorbed into the economy and other jobs.''
Moskow said the Fed is carefully watching rising energy prices. ``In essence, it's like a tax increase,'' he said. ``It hurts
businesses as well, increases their costs. It's one of the elements of the risk that we see toward weaker economic
growth going forward.''
Moskow said earlier this month that he did not see a significant risk of recession, though there has been slowing in the
economy.
A Chicago Fed spokesperson could not be reached to comment on the Sun-Times article.
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