Hurricanes complicate short-term economic forecast — US Fed official

Monday, September 25, 2017

Print this page Email A Friend!

WASHINGTON, United States (AFP) — The impact of the three hurricanes that hit the US mainland and territories in recent weeks will complicate economic forecasts in the short-term, but the American economy remains likely to see solid growth, a US central banker said Monday.

That means the Federal Reserve can continue to raise the benchmark interest rate gradually, New York Federal Reserve Bank President William Dudley said, echoing the Fed's policy statement last week when it kept interest rates on hold, but kept alive the prospects for third rate increase in December.

In the first public comments since the Fed meeting, he noted that Hurricanes Harvey, Irma and Maria have "imposed immeasurable hardship" on the communities in the storms' path, but the impact on the overall economy is likely to be short-lived.

"Looking beyond the storm effects — which will make interpreting near-term economic data releases more difficult --the US economy remains on a trajectory of slightly above-trend growth," Dudley said.

"Natural disasters tend to depress economic activity initially, but once the recovery and reconstruction efforts get underway in earnest, such disasters actually serve to lift economic activity."

Dudley repeated the comments from Fed Chair Janet Yellen last week saying "the fading of effects from a number of temporary, idiosyncratic factors" mean inflation finally will begin to rise to the Fed's two percent target in the medium term.

The Fed has consistently brushed off below-target inflation by citing one-off price declines, but the central bank last week signalled that despite tepid price pressures a third interest rate hike is still possible in December.




1. We welcome reader comments on the top stories of the day. Some comments may be republished on the website or in the newspaper � email addresses will not be published.

2. Please understand that comments are moderated and it is not always possible to publish all that have been submitted. We will, however, try to publish comments that are representative of all received.

3. We ask that comments are civil and free of libellous or hateful material. Also please stick to the topic under discussion.

4. Please do not write in block capitals since this makes your comment hard to read.

5. Please don't use the comments to advertise. However, our advertising department can be more than accommodating if emailed:

6. If readers wish to report offensive comments, suggest a correction or share a story then please email:

7. Lastly, read our Terms and Conditions and Privacy Policy

comments powered by Disqus



Today's Cartoon

Click image to view full size editorial cartoon