Lyle Gramley
Lyle Gramley
Lyle Elden Gramleywas an American economist. Involved in economic policymaking during the Carter and Reagan presidencies, he served on the Council of Economic Advisers from 1977 to 1980, and on the Federal Reserve Board of Governors from 1980 to 1985...
early fed happen heading inflation late low means might rate sees sit starting time turning until
This time, we're starting with an inflation rate that's too low and heading lower, ... What that means is the Fed will sit still until such time as it sees inflation start turning up -- which might not happen until late 2004 or early 2005.
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The Fed will be content to sit on the sidelines to await more definitive evidence as to whether inflation is going to be a problem or not, ... Setting the election aside entirely, the Fed, looking at the incoming data, would say to itself 'right now we don't want to raise interest rates and we don't need to raise interest rates.'
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This is a situation where the uncertainties have suddenly become huge. If all the concerns translate into much lower personal spending, then the economy could falter.
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I don't think there's any doubt they'll go to 5 percent in May. I expect them to sit still after that.
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There are a lot of worries circulating around about deflation, ... What the Fed is doing is saying we don't need to worry. If deflation happens, they will counter aggressively, and they have the tools to do so.
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Financial markets are going to become uneasy about this because Alan Greenspan has become an oracle,
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What the Fed is trying to do, by being more transparent and more communicative, is highly desirable. But there are going to slips along the way. Ben will learn and the markets will learn.
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If this deterioration continues, I think the chances of another rate cut are going to increase significantly, and I wouldn't rule out the possibility of an inter-meeting move,
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I don't know what the bond market has been worried about. There's much talk about the possibility of inflation beginning to pick up. I don't see any signs of that at all apart from the rise in energy prices, which we all knew was going to take place.
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My concern is not with a double-dip recession. It's with the likelihood we are gong to be in an extended period of growth below potential, and that would mean rising unemployment.
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Mortgage rates haven't been significantly lower than the rates we have today since the 1960s.
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It doesn't seem to me at all appropriate for a secretary of the Treasury to make such comments in any event,
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I think he's well aware of the fact they need to improve (communication). It's very a difficult thing to do. I think they're improving.
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The apparent bubbling up of inflation we saw earlier in the year has quieted down again. Basically it's a picture of inflation staying reasonably tranquil. The Fed should like that.