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Fed's Williams Says Concerted Effort Needed To Drive Economic Growth Higher

27 Jun 2017 8:05 am
By Michael S. Derby 

Federal Reserve Bank of San Francisco President John Williams said Tuesday it would take a concerted public and private effort to get the U.S. and other major economies out of their current low-growth mode.

His warning, made in a speech in Sydney, c ast some doubt on current Trump administration proclamations that it will be able to push the U.S. out of its 2% growth trend toward something notably higher.

"The big dichotomy of our times is that in country after country, the economic news is at once both encouraging and discouraging: encouraging that economies are expanding; discouraging that growth is disappointing, at least by historical standards," Mr. Williams said in prepared remarks to the audience in Australia.

"Demographic factors like slowing population and labor force growth and a global productivity slowdown are fundamentally redefining what is achievable and creating a new set of economic challenges," the official said. "These challenges have ramifications that extend beyond the next few months or years -- they will define the economic landscape for the next decade and beyond."

As things now stand, the growth outlook for the U.S. is likely to stand at around 1.5%. Because of that, monetary policy-making will be more difficult because lower growth means the Fed will have less room to raise rates and will be more likely to turn to what were once unorthodox tools to help influence the economy, Mr. Williams said.

"Our long-term challenges are going to require the sort of long-term investments that fiscal policy makers -- and private investors -- have within their own tool kits," Mr. Williams said. "Investments in education, job training, infrastructure, research and development" will be needed to create "prosperity over the longer term," he said.

Write to Michael S. Derby at michael.derby@wsj.com
 

(END) Dow Jones Newswires

June 27, 2017 04:05 ET (08:05 GMT)

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