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December 5, 2004 04:46 PM

Fed Sees Growth, Measured Rate Hikes


Excerpt: The U.S. economy should grow about 4.0 percent next year, giving the Federal Reserve room to continue raising interest rates at a measured pace, Philadelphia Fed President Anthony Santomero said on Friday.


The U.S. economy should grow about 4.0 percent next year, giving the Federal Reserve (news - web sites) room to continue raising interest rates at a measured pace, Philadelphia Fed President Anthony Santomero said on Friday.

In prepared remarks to the Philadelphia Fed's annual policy forum, Santomero said economic growth in this range should support continued "solid but moderate gains" in employment through next year.

His comments were prepared before the release of the weaker-than-expected November payrolls report on Friday.

"Looking ahead, I expect real GDP (news - web sites) growth to be in the neighborhood of 4 percent for 2005," the Fed official said. This is a slight upgrade to his previous GDP forecast of 3.5 percent to 4.0 percent growth.

"Given this scenario, the Fed should continue moving monetary policy toward a neutral stance at a measured pace and thus keep inflationary pressures well-contained," Santomero said.

"Indeed, honoring our commitment to price stability is essential to ensuring the longevity of the expansion," he added. Santomero will be a voting member of the Fed's policy committee next year.

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Read all 21 posts in the same category of Economy:

U.S. Quiet on China Trade Tax - Dec 17, 2004
Fed Raises Interest Rates for 5th Time This Year - Dec 17, 2004
OPEC Considers Output Cut to Keep Prices From Falling - Dec 09, 2004
A Plan For U.S. Energy Security? - Dec 08, 2004
Fed Heading For A Pause - Dec 07, 2004
Social Security Reform = New Debt - Dec 06, 2004
Weak Employment Rport Casts Doubts Over US Economic Strength - Dec 05, 2004
Fed: Inflation Not Setting Off Alarms - Dec 05, 2004
Balancing Act On The Buck - Dec 04, 2004
Job Growth Is Well Below Wall Street Forecasts - Dec 03, 2004
Fed Reports Growth In 11 Of 12 Regions - Dec 02, 2004
Inflation Under Control, Fed Gov. Says - Dec 02, 2004
Global Forecasts for 2005 Growth Are Reduced - Nov 30, 2004
Borrowing For Social Security Plan? - Nov 28, 2004
No Longer Top Dollar? - Nov 26, 2004
Don't Worry ... Don't Be Happy - Nov 26, 2004
Is Another Recession Brewing? - Nov 25, 2004
Inflation Is Tame, Right? - Nov 24, 2004
The Dollar Is Down, But Should Anyone Care? - Nov 21, 2004
Bush Sets Plans To Revamp Taxes, Social Security - Nov 04, 2004