WASHINGTON — Federal Reserve Bank of Cleveland president Sandra Pianalto Wednesday said the Fed’s current approach to its conduct of monetary policy is appropriate, given the “fairly slow” pace of U.S. economic growth and the expectation that there will no sustained rise in consumer prices.
However, monetary policy will eventually have to become less accommodative and the Fed has been developing the tools for its exit, Pianalto said in remarks at Xavier University in Cincinnati. “I am confident that we will be ready to use them when the time is right,” she said.
In a speech that focused on her economic outlook and what it means for monetary policy, Pianalto bemoaned the less-than-rapid pace of the ongoing recovery and said she expects this modest level of growth to continue.
Her current outlook calls for the economic recovery at a gradual pace over the next few years, with annual growth at just above 3% a year.
“That is a fairly slow pace, considering how much ground we have to make up,” she said.
