Federal Reserve Optimistic about Economy

According to Federal Reserve Vice Chairman Donald Kohn, the economy is possibly showing signs of forthcoming stability. However, Kohn is not so optimistic about the strength of the economy, even after it has recovered, and has confirmed that rate hikes will not be coming any time soon.

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Kohn’s comments on the economy, which he made at a conference at Princeton University, are not quite as optimistic as those made by the Federal Reserve’s staff in late April. Still, Kohn defended the governmental program to buy up toxic assets as necessary to avoid an economic crisis that could have been even worse.

As far as the lack of any foreseeable rate hikes, Kohn suggests that near-zero rates strengthen the healing effect of economic stimulus packages, meaning that the two should come hand-in-hand.

Source: Wire Reports