(REUTERS) UPDATE 1-Fed doesn't have much interest rate leeway-Broaddus
HOT SPRINGS, Va., June 18 (Reuters) - The Federal Reserve
does not have much room to further boost the economy with
monetary policy after aggressively cutting interest rates this
year, Richmond Fed President Alfred Broaddus said on Monday.
Broaddus said, however, that more rate cuts may be needed.
He warned that it is possible the U.S. economy has not hit
bottom yet and weakness in the manufacturing sector may spread
to other sectors of the economy.
His comments largely mirrored remarks he delivered in
Washington two weeks ago.
Broaddus' comments came a little more than a week before
the Fed next meets to discuss interest-rate policy. Analysts
widely expect the powerful central bank to cut rates again at
the conclusion of a two-day meeting on June 27, but there is
some disagreement over how far the Fed will go.
The Fed has cut interest rates five times this year by an
aggressive half-percentage point each time, bringing the key
fed funds rate to 4.0 percent, its lowest level in seven years.
According to a poll conducted by Reuters on Friday, 19 out
of the 25 primary dealers that deal directly with the Fed in
open market operations expect a quarter-point cut next week,
while six dealers said they expected a more dramatic
half-percentage point cut.
Broaddus is not a voting member on the Fed's policymaking
committee this year following the usual rotation among regional
Fed presidents.
((Washington newsroom, 202-898-8370, fax 202-898-8383,
washington.economic.newsroom@reuters.com))
REUTERS
*** end of story *** |
