Kansas City Fed President, Esther George, told FOX Business on Wednesday that the U.S. economy is “doing well” but she's not “blind” to the risk around it.
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“I think we have to be very vigilant,” she told Edward Lawrence at the Federal Reserve’s annual conference. “What I'm watching for is, since the consumer is essentially leading this economy right now, can it continue to do so? And what could get in the way of that.”
George forecasted 2 percent growth for this year but believes business investments and exports are “holding back” that segment of the economy.
“Business investment has flattened out and there are a variety of reasons for that,” she said. “I think a very prominent one is the amount of uncertainty businesses may have about their products and where they're going manufacturing a strong dollar.”
In order to get businesses to start spending again, George said, “monetary policy tools really have to be aimed at that broad economy.”
George was one of two Fed officials who dissented in the last FOMC meeting for a rate cut in July. The Fed minutes revealed that several members felt the rate should stay in a range between 2 percent and 2.25 percent, however George said she based her decision on the performance of the economy.
“It had to do with how are we doing relative to our mandates from Congress around employment and price stability and in my view we have a very low unemployment rate right now, the job market looks healthy, the consumer seems to be healthy right now, and inflation is low and stable,” she explained.
But for now, Esther is keeping a mindful eye on consumer.
“If that turns,” she said, “I'll have to recalibrate and think about my forecast.”