Federal Reserve Bank of Cleveland president Sandra Pianalto said on Friday that prolonged low inflation is as much of a threat for the US economy asexcessively high inflation. She stressed that it should be prevented from falling below 2%.
The Fed policymaker suggested that the US economy, propped up by the central bank's easy monetary policies, should grow at a faster pace this year, reaching 3%. She stressed that education was the key to strengthening the manufacturing sector. She saw the unemployment rate falling further to 6.2% from 6.7% in 2014.
Sandra Pianalto's speech was her last before retirement. She will be replaced by Loretta Mester who is expected to follow in her footsteps as far as monetary policy is concerned.