NEW YORK, March 27 (Reuters) – Philadelphia Federal Reserve President Anna Paulson said on Friday the Iran war is creating challenges \u200cfor the U.S. economy, while stopping short of saying \u200cwhat that might mean for near-term changes in monetary policy.<\/p>\n
“The conflict in the Middle \u200bEast has created new risks to both inflation and growth,” Paulson said in the text of a speech to be delivered at an event held by the San Francisco Fed.<\/p>\n
She noted that inflation has exceeded \u200cthe U.S. central bank’s \u20602% target for an extended period despite “significant progress” to lower price pressures. Paulson added that longer-run inflation expectations \u2060are “consistent” with the that goal, but added “they may also be a little more fragile.”<\/p>\n
Paulson’s comment on the current economic challenges was delivered in \u200bremarks that \u200bmulled how the rise of artificial \u200bintelligence technologies might affect the \u200cfuture of the economy and how the Fed might respond, noting the uncertainty of understanding in real time what is driving the current jump in productivity.<\/p>\n
She explained that a jump in economic growth that could be driven by AI-driven productivity gains would be tough for \u200cthe central bank to respond to, \u200bgiven above-target inflation.<\/p>\n
“If inflation were at the \u200b2% target, I would \u200bfeel more comfortable being patient, keeping monetary policy on \u200chold and waiting to see if \u200ba hypothetical growth \u200bsurge puts upward pressure on inflation,” Paulson said.<\/p>\n
“But if inflation is above 2% and has been for some time, I \u200bwould be more cautious,” \u200cshe said. “I would be inclined to weight the possibility of \u200boverheating more heavily in determining appropriate policy.”<\/p>\n
(Reporting by Michael \u200bS. Derby; Editing by Paul Simao)<\/p>\n","protected":false},"excerpt":{"rendered":"NEW YORK, March 27 (Reuters) – Philadelphia Federal Reserve President Anna Paulson said on Friday the Iran war…\n","protected":false},"author":2,"featured_media":548991,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,2447,101,81621,9335,244528,244526,244527],"class_list":["post-548990","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economic-growth","tag-economy","tag-inflation-expectations","tag-monetary-policy","tag-paulson","tag-philadelphia-federal-reserve-president-anna-paulson","tag-san-francisco-fed"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/548990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=548990"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/548990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/548991"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=548990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=548990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=548990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}