Federal Reserve Board governor Elizabeth Duke warned Monday evening that a “premature withdrawal” of monetary and fiscal stimulus measures could worsen and prolong the recession.
Duke contended that Fed and other government programs to counteract the financial crisis have worked to improve credit conditions and keep credit contraction “quite subdued,” relatively speaking. But she said that if those programs are ended “too soon,” the result could be “a significantly weaker path of lending.”
Duke, in remarks prepared for the Women in Housing and Finance Annual Meeting, said the Fed’s special credit facilities, as well as other government programs, have been successful in keeping the credit crunch from being a lot worse than it otherwise might have been.
— Market News International
