U.S. Markets

Fed's Brainard says global economy 'brighter,' less risk to Fed outlook

Federal Reserve Board Governor Lael Brainard speaks at the John F. Kennedy School of Government at Harvard University in Cambridge, Massachusetts, U.S., March 1, 2017. REUTERS/Brian Snyder

WASHINGTON (Reuters) - Federal Reserve Governor Lael Brainard said on Thursday that a brighter global economy is posing less risk to the Fed’s outlook for the U.S.

“The global economy is brighter than it has been for the last few years,” Brainard said at a panel at the Center for Global Development.

Brainard has been among the chief Fed officials concerned about the impact weak global growth posed to the U.S.

Her comments add to the signal the Fed sent in minutes released this week that the central bank is likely to move forward with an expected rate increase in June.

According to the minutes, policymakers at the May meeting noted that global risks were receding after years in which volatility in China, collapsing oil prices and slow growth in Europe slowed the Fed from planned rate increases.

Brainard, asked about the Moody’s downgrade of China this week, said she felt the country faced the “tricky” task of slowing growth while managing debt.

But “we are also seeing the euro area really growing more solidly,” Brainard said, alleviating what has been a key concern for some Fed officials.

Reporting by Howard Schneider; Editing by Chizu Nomiyama and Alistair Bell