Federal Reserve Bank of Atlanta President Dennis Lockhart said Monday that QE3 will work under the right circumstances. "But I don't believe such circumstances prevail at this time."
However, he said, "I do not think this option can be taken off the table." Lockhart said policymakers face challenge of choosing appropriate tool to match the circumstances.
According to him, use of the tool of refined communication is an appropriate incremental policy action. The communication approaches perfection when attentive public understands how the monetary authority is going to behave.
"The FOMC should continue to clarify its strategy for the medium and long term so that the public can discern how the committee arrives at decisions," central banker said in Tokyo.
Further, Lockhart expects modest economic growth over the coming few years. He sees inflation remaining steady at around 2 percent over the forecast horizon. The banker judges the risks to the U.S. outlook as tilted modestly to the downside.
by RTT Staff Writer
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