The policies outlined by President-elect Donald Trump could boost the U.S. economy if they improve productivity, St. Louis Federal Reserve President James Bullard said on Monday.
Bullard said properly designed and executed policies to boost infrastructure, modify regulations for some industries, and overhaul the tax code “may have some impact … if they are directed towards improving medium-term U.S. productivity growth.”
Bullard views the U.S. economy as stuck in a low-growth rut, and feels that the central bank only needs to raise interest rates one more time before reaching what he regards as the appropriate level for that low-growth environment.
The Fed’s policy-setting committee is expected to raise rates when it meets next week.
In remarks prepared for delivery at an event in Phoenix sponsored by Arizona State University, Bullard said it is too early to tell if the policies expected from the Trump administration could move the economy to a different “regime.”
But he, like several other Fed officials in recent days, offered some guidelines, particularly that any changes be targeted to boost productivity and growth on a permanent basis, not designed as short-term stimulus.
“The economy is not in recession today, so these policies should not be viewed as countercyclical measures,” he said.
source”cnbc”
