Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. economy would need to deteriorate further to warrant additional asset purchases, or so-called quantitative easing, by the Fed.
“The bar for initiating another round of quantitative easing should remain high,” Lockhart said today in response to questions after a speech in Hong Kong. In order to support more bond buying, “I would have to see a serious deterioration of the economy,” such as “real layoffs, real job destruction” or the threat of falling prices, he said.
Several Fed policy makers said a loss of momentum in growth or increased risks to their economic outlook could prompt additional action to spur the recovery, minutes of their April 24-25 meeting showed last week.
The U.S. jobless rate will probably fall slightly below 8 percent by the end of this year, Lockhart said.
The economy confronts headwinds including household deleveraging and a “major drag” from housing on “consumer thinking,” he said.
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