BEIJNG – A top economic adviser to President Barack Obama said Tuesday he sees no short-term way to reduce high U.S. unemployment and expects slow growth for the near future.
The comments from Paul Volcker come after the Federal Reserve announced last week that it would purchase $600 billion in Treasurys, aiming to lower long-term interest rates in an effort to spur spending and ultimately lower the U.S. unemployment rate, currently at 9.6 percent. The move comes on the heels of previous purchases of $1.7 trillion in mortgage and Treasury bonds.
“I have no answer to it at the moment, and I think that is the basic problem. I suspect that it will gradually decline,” Volcker said when asked about the unemployment rate. “But the basic fact of the matter is that the economic outlook is for continuing but limited increases in economic activity for the next year or more.”
Volcker is chairman of Obama’s Economic Recovery Advisory Board, and served as Fed chief from 1979 until 1987 under presidents Jimmy Carter and Ronald Reagan.
He was speaking in Beijing at a meeting of the International Financial Forum, a non-governmental group of bankers and finance officials from the Untied States, China and other countries.