--Fed's Minehan sees inventory adjustment severe but short-lived
--Fed Minehan sees US inventory overhang as short-term challenge
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--Fed's Minehan: Current econ slowing painful for manufacturers
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--Fed's Minehan says strong US productivity still intact
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By Mariko de Couto, BridgeNews
New York--Feb. 12--Boston Federal Reserve Bank President Cathy Minehan said Monday that she expects the U.S. economy to grow at an average pace of about 2% this year, which is slightly lower than her forecast of 2% to 3% growth in early January. Minehan, speaking at a conference, also acknowledged that the current inventory correction in the U.S. economy is severe but said it will be short-lived.
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Minehan, speaking at the annual conference of International Treasury Management in Boston, said that "in my view, the economy is likely to continue feeling the effects this quarter of a significant but relatively short-lived inventory correction."
The "just-in-time" inventory process and the faster pace of production adjustments now will make may the process of reversing the inventory overhang much quicker than usual, she said.
The ongoing inventory drawdowns are a result of an overly rapid adjustment toward a more sustainable rate of growth in demand, she said.