Federal Reserve Vice President Says U.S. Economy Doing Well

Federal Reserve Vice President Says U.S. Economy Doing Well

By: Daniel Steingold | August 21, 2016

Stanley Fischer, the vice chairman of the Federal Reserve, said on Sunday that the U.S. economy is close to its job and inflation targets.

Fischer called the current employment situation “impressive,” noting that since a low in 2010 following the financial crisis, the unemployment rate has stayed around 5 percent over the last year.

He also pointed out that core inflation stood at 1.6 percent from June 2015 to June 2016, which is very close to the two percent range that the Fed targets.

Two of the main measures that the Fed is measured on are inflation and sustainable employment.

Fischer also highlighted how he expects the American GDP to improve, “as investment recovers from a surprisingly weak patch and the drag from the past dollar appreciation diminishes.”

The comments come amidst speculation on whether the Fed will raise interest rates in the near future. The last increase came this past December, which brought the rate back up from close to zero percent, and was the first increase in nearly a decade.

Fischer expressed optimism about how the U.S. economy has been “remarkably resilient,” despite Greece’s debt crisis, the slowdown in Chinese growth, and the British exit from the European Union.

He did use his platform, however, to point out that worker output per hour had shown a very weak increase from 2006 to 2015. It was the weakest stretch since 1979.

Fischer called for “some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation” to promote “faster growth of productivity and living standards.”

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