Fed must also think of other economies as it sets policy: Fed’s Tarullo
WASHINGTON—Federal Reserve Gov. Daniel Tarullo expressed concern Saturday about global economic growth, saying he sees “more downside risks than upside risks” in the world’s major economies.
Mr. Tarullo, who sits on the Fed committee setting interest-rate policy, said the U.S. economy “appears to have some momentum for what is still moderate growth,” but the Fed must also think about how other economies are doing when making policy decisions.
Mr. Tarullo, speaking at a conference here hosted by the Institute of International Finance, also said he is concerned about U.S. economic productivity, pointing to a lack of investment in machinery and other infrastructure as well as the need for workers to “have the right set of skills and education.”
“The focus on productivity has got to accompany a focus on aggregate demand and those two things need to be pursued together,” he said. “This is not quick turnaround.”
Mr. Tarullo said that market participants looking for clues about when the Fed will raise interest rates should pay attention to Fed Chairwoman Janet Yellen ’s public comments. “It’s important to keep in mind it is something that is based on our expectations of what’s going to happen,” Mr. Tarullo said of the Fed’s interest-rate plans.
