Magazine article American Banker

Moderate U.S. Growth to Continue, President of Richmond Fed Predicts

Magazine article American Banker

Moderate U.S. Growth to Continue, President of Richmond Fed Predicts

Article excerpt

BATON ROUGE, La. -- Leaving aside the possible effects of fiscal policy, the U.S. economy is poised for continued moderate growth, according to Alfred Broaddus, president of the Federal Reserve Bank of Richmond.

Consumer spending slowed in the first quarter a "buying rampage" in late 1992, Mr. Broaddus told bankers attending the Graduate School of Banking of the South at Louisiana State University.

Car sales and other spending trends picked up in the second quarter, he added.

Spending on Equipment

Business spending on equipment is favorable and "there are at least some signs of economic revival" in major export markets. particularly Britain, Canada, and Germany, Mr. Broaddus said.

The big unknown is the effect on the U.S. economy of the Clinton administration's economic package, Mr. Broaddus said.

The public seems most concerned about the budget package's heavy reliance on tax increases and is uncertain the plan will clearly and permanently reduce the deficit, the Fed official said.

Regardless of the fiscal policy, Federal Reserve officials will watch the economy with an eye toward keeping prices stable.

"Our objective is to eliminate inflation as a practical force in the business and economic decisions of the American economy, not immediately but over a reasonable period of time, and restore stable pricing levels like we enjoyed back in the middle of the 1950s and early 1960s," Mr. Broaddus said.

Community Reinvestment

Also speaking at the LSU program, Federal Reserve Governor Susan Phillips said the Clinton administration is certain to keep community reinvestment and fair lending issues at center stage. …

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