The U.S. economy still needs support from the Federal Reserve even if growth prospects appear firmer, top Federal Reserve officials said on Friday.
The expansion must become more stable and broad-based before the Fed reverses its current policy, and even more stimulus may be needed if the housing market hampers the rebound, said Boston Fed Bank President Eric Rosengren.
“There will be a time when these aggressive actions need to be reversed, but first we need to get the economy on a much more solid footing,” said Rosengren, who is considered one of the more dovish members of the Fed, and rotated out of a voting slot in the Fed’s policy-setting panel this year.
Daniel Tarullo, a governor of the Fed’s Washington-based board, told CNBC he saw no reason to tinker with the central bank’s $600 billion bond buying program.
However, Jeffrey Lacker, the hawkish Richmond Fed Bank president who has been skeptical of the Fed’s latest round of bond purchases, appeared more keen on reviewing the program.
“The provision of further monetary stimulus at this point in the business cycle is not without risks,” Lacker told the Risk Management Association’s Richmond, Virginia, Chapter.
“While the outlook may not have improved enough just yet to warrant adjusting our purchase plan in the near-term, I anticipate earnest reevaluation as economic developments unfold in coming months,” he said.
Lacker offered a rather positive outlook for the U.S. economy despite ongoing troubles in housing and a labor market that remains too anemic to generate jobs for the millions of Americans who lost them during a deep recession in 2008-2009.