"Certain fiscal policies, particularly those that increase
productivity, can increase the potential of the economy and help
confront some of our longer-term economic challenges," said Fed
Vice Chair Stanley Fischer.
"Some combination of improved public infrastructure, better
education, more encouragement for private investment, and more
effective regulation all likely have a role to play in promoting
faster growth of productivity and living standards," he said at
the Council on Foreign Relations.
Fischer's remarks come nearly two weeks after Americans shocked
pollsters by electing as president Republican Donald Trump, who
campaigned on a platform of infrastructure spending, tax cuts,
and renegotiated or canceled international trade pacts.
The economy, eight years after the worst of the recession, is
now in "the vicinity" of the U.S. central bank's employment and
inflation goals, Fischer said, adding it was performing
In his prepared remarks, Fischer did not elaborate on the
regulations or private investments to which he was referring.
But he said fiscal adjustments could support years of
accommodative monetary policy, and he endorsed economist Mohamed
El-Erian's description in his book of the Fed as almost the
"only game in town."
(Reporting by Jonathan Spicer; Editing by Chizu Nomiyama)
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