Federal Reserve policy makers are prepared to reduce interest rates again if the US economy shows signs of continued weakness, said Anthony Santomero, president of the Federal Reserve Bank of Philadelphia.
Four rate reductions by the Fed since the start of the year will probably cause the economy to rebound in the second half, he told the Delaware Credit Union League in Dewey Beach, Delaware.
``While considerable uncertainty remains and there are risks along the way, I do not expect this slowdown to halt the economic expansion,'' Santomero said.
Because inflation isn't accelerating, ``the Fed has the latitude to again respond quickly and effectively. Just as I believe as we have done in the past four months and as we are prepared to do again,'' he said.
Santomero, a non-voting member of the Open Market Committee, described the Fed's recent actions as a needed reaction.. ``Monetary policy must be flexible and responsive to rapidly unfolding economic developments.''
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