- Stanley Fischer, Fed Vice Chair
Federal Reserve Vice Chairman Stanley Fischer said on Monday that disappointing recovery of the global economy may have a adverse impact on the U.S economic performance, which in the long-run may grow at a moderate pace of just 2%. Despite some improvements, the overall picture remains sluggish, he said and pointed to some deeper problems in the global recovery. Fischer said that a slowing productivity, falling labour force participation rate and other factors may have undermined the U.S. ability to generate sustainable economic growth. The falling participation rate in the U.S. labour market partly reflects aging population trend. It remains uncertain, though, whether lower productivity growth and lower labour force participation rates are now permanent features of the U.S. economy, complicating projections of growth, inflation, and the amount of slack in labour and product markets. The recent global financial crisis and recession has been forcing central bankers around the world to change their perception of inflation, employment and growth in general.
He also mentioned a number of factors that have contributed to a weak growth including U.S. housing market, lukewarm performance of European economies including Germany and France, but also hard lending in China and a similar stepdown in Latin America.
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