July 2, 2012 / 7:23 PM / 7 years ago

Fed's Williams: timing of exit depends on economy

SAN FRANCISCO (Reuters) - The Federal Reserve’s eventual exit from its super-easy monetary policy will depend on the economy’s performance, and it is important to remember that monetary policy is “not a panacea,” a top Fed official said on Monday.

Fed policy alone cannot reverse uncertainties over domestic fiscal policy or the future of Europe’s debt crisis, both of which weigh on the U.S. economy, San Francisco Fed President John Williams told a panel at the Western Economics Association International conference.

But one thing the Fed has accomplished, he said, has been to keep the U.S. economy out of a deflationary spiral like that which kept the Japanese economy on the ropes for years. (Reporting by Braden Reddall; Writing by Ann Saphir; Editing by James Dalgleish)

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