11 April 2001, 11:22  FED'S POOLE NOT SCARED OF EXTERNAL US DEFICIT

Far from being a problem, the record U.S. current account deficit reflects theeagerness of foreigners to invest in the United States, thereby keeping the U.S.dollar strong, St. Louis Federal Reserve Bank President William Poole saidTuesday. Poole, in remarks to business and community leaders in Dyersburg,Tennessee, said he could not foresee foreign investors liquidating their U.S.assets and precipitating dollar depreciation and financial crisis. And he said hesaw no market signals on interest rates or exchange rates that U.S. borrowingabroad is meeting resistance. But Poole, a voting member of the Fed'spolicymaking Federal Open Market Committee, warned it is "crucial" to keepinflation under control if foreign investor confidence is to be maintained. Evennow, when the Fed is focused more on fighting economic weakness thancombating inflation, Poole said the Fed must guard against rising inflation.

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