A voting member of the Federal Reserve's policy setting body said Friday that current economic growth is "anemic" and suggested the central bank consider additional stimulus measures to help boost it.
"I think the question is, over the whole course of the recovery, what track do we appear to be on?" said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta. "And I am increasingly convinced we’re on about a 2% growth track that is very anemic and is not producing sufficient job gains to really bring down the unemployment level at any pace that we would consider to be acceptable."
"So I think that we have to think about whether or not there’s something more that could be done that can put that economy on a different trajectory, a different track," he said in an interview with FOX Business at the annual meeting of central bankers in Jackson Hole, Wy., sponsored by the Federal Reserve Bank of Kansas City.
He added that he had made no decision yet on whether to support additional monetary easing and that he and his staff are in the process of analyzing the costs and benefits of further measures ahead of the next meeting of the Federal Open Market Committee on Sept. 12-13.
"I think the appropriate approach is to weigh what benefits you would get from some such an action versus the risks or the costs over the longer term," he said. "And the way I have thought about it recently -- and I’ve said this publicly -- is I see the benefits as limited, but I also see the risks and costs as manageable."
He added, "Now, the more nuanced situation would be, really, in my case, coming to the opinion that the benefits actually are greater than the costs and that we could make significant progress...--particularly on our employment mandate--by adding new easing."
In the minutes of its most recent meeting, July 31-Aug.1, FOMC members discussed three options for stimulating the economy further: expanding its bond-buying program to help push interest rates down even more--so called "quantitative easing"; publicly pledging to keep short-term interest rates low for even longer; and reducing the interest it pays banks that keep trillions on deposit at the Fed, which might encourage them to lend it rather than park it at the central bank.
The Fed will be looking for more clues to the health of the economy with the jobs report for August, to be released this Friday.