Fed's Fischer Says Global Economic Expansion Appears 'entrenched'

Federal Reserve Vice Chairman Stanley Fischer on Wednesday said there's been a "benign" foreign market reaction to the central bank's two rate hikes in four months. "The main reason for the positive market reaction is that foreign output expansions appear more entrenched, and downside risks to those economies noticeably smaller than in recent years," said Fischer at an event ahead of the International Monetary Fund's spring meeting. He pointed out that European unemployment has fallen and China's economy also is on a more solid footing. He says there's a chance foreign economies kick into gear enough that U.S. and foreign business conditions become aligned, as they did during the tightening cycles that began in 1999 and 2004. "A gradual and ongoing removal of accommodation seems likely both to maximize the prospects of a continued expansion in the U.S. economy and to mitigate the risk of undesirable spillovers abroad," Fischer added.