Feb 28 Despite recent signs of a possible
slowdown, the growth story for the U.S economy remains intact,
top Federal Reserve officials said on Friday, suggesting they
will continue to support reductions in the Fed's massive
Recent bad weather in large portions of the United States is
having an impact on economic activity, but that is no reason for
less optimism about economic prospects for the rest of the year,
St. Louis Federal Reserve President James Bullard told CNBC
television on Friday.
His remarks came as the U.S. government slashed its estimate
for fourth-quarter growth as consumer spending and exports were
less robust than initially thought, suggesting some loss of
momentum heading into 2014.
The revised estimate puts fourth-quarter growth at an annual
rate of 2.4 percent, down from an earlier estimate of 3.2
percent. First-quarter data has also come in weaker than
expected, as unusually cold weather took a toll on retail sales,
housing and other metrics of growth.
Still, even if the recent spate of soft data is entirely
unrelated to weather, Bullard said he remains optimistic.
"I'd still project that 2014 would have stronger GDP growth
than 2013 did and I'd still project that inflation would come
back to target," he said.
Charles Plosser, the hawkish president of the Federal
Reserve Bank of Philadelphia, concurred in nearly simultaneous
remarks on another news channel.
"The data is very noisy right now, extremely noisy with the
weather and other things," Plosser said in an interview on
Bloomberg News. "We have to be a little patient."
Plosser said he was optimistic about the nation's turnaround
and said the economy is "in a firmer position than it's been in
a number of years." He also reiterated forecasts, saying he sees
close to 3 percent growth for 2014.
"We're going to have a sort of steady pace of growth going
forward," he told Bloomberg.
After more than five years of super-easy monetary policy in
the wake of the 2007-2009 recession, the Fed is taking the first
small steps toward a more normal interest-rate environment. It
trimmed its bond buying program by $10 billion in each of the
past two months, and it expects to raise interest rates some
time next year as long as the economy continues to improve.
Though the views of both Bullard and Plosser are sometimes
at odds with those at the core of the Fed's policy-making
decisions, their comments on Friday appeared to reflect the
dominant line of thinking at the Fed.
On Thursday, new Fed Chair Janet Yellen attributed much of
the recent weak economic data to bad weather and suggested that
only a significant change in the economic outlook would drive
the Fed to reconsider its plan to wind-down its massive
bond-buying program this year.
Dallas Fed President Richard Fisher, speaking in Zurich,
wholeheartedly embraced that plan.
"As soon as feasible, the Federal Reserve should stop
large-scale asset purchases entirely," said Fisher, who has a
vote on the Fed's policy panel this year.
The Texan is one of the most outspoken opponents of the
current round of bond buying, which has swollen the Fed's
balance sheet to more than $4 trillion.