A growing number of US economists fear the US Federal Reserve has been too cautious in its interest-rate cuts, a survey showed today.
The survey by the National Association for Business Economics was taken in early March, prior to the Fed's March 20th interest rate-setting meeting, at which it reduced interest rates by a half-percentage point. The move marked the third rate reduction by the US central bank this year.
Nonetheless, the results of the poll of a panel of 267 NABE members indicated many were very concerned about the weakness in the economy and wanted the Fed to act aggressively.
"Goodbye Goldilocks," the NABE said in a summary of the survey results, referring to an expression which describes US economic growth as neither too hot nor too cold.
In the latest NABE survey, 56 per cent of the poll participants described the Fed's posture as "just right". That was the lowest percentage of economists agreeing with Fed policy in more than five years.
As they did in 1996, most economists who disagreed with Fed policy felt it was too restrictive. Thirty-four per cent in the latest NABE poll described it as such, versus only 7 per cent who was said it was too stimulative.