NEW YORK May 6 A Federal Reserve governor said
on Tuesday that weaker U.S. productivity and potential growth
could point to a lower average federal funds rate over the
The federal funds rate is the U.S. central bank's primary
tool for conducting monetary policy. In the past it has averaged
about 4 percent in nominal terms, or 2 percent in real terms.
Fed Governor Jeremy Stein said that, given longer-run
factors like productivity, potential economic growth and savings
rates, "I think you can make an argument that over some medium
run those things ... point toward a qualitatively lower value
than the historical average."
Speaking at a bond traders dinner, he added it was unclear
how long that might persist.
(Reporting by Jonathan Spicer; Editing by Eric Walsh)