Austerity budgets can stymie the moderate recovery the U.S. is experiencing and while accommodative monetary policy has fueled the recovery, fiscal restraint can tamp it, Federal Reserve Bank of Cleveland president Sandra Pianalto said Monday.

"The threat of fiscal austerity in the U.S. and in other countries around the world represents a near-term risk to the global economic recovery," she said in a speech in Florida, according to prepared text of her remarks, released by the Fed. "Large debt obligations in many countries present risks to long-term economic growth."

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