Reuters
Fed has ‘difficult’ call to avoid overdoing rates shock, Romer says
NEW ORLEANS (Reuters) -The Federal Reserve’s effort to shock the economy back to lower inflation is in its early days, making it tough for the U.S. central bank to avoid overdoing it with higher-than-needed interest rates, a top economic adviser in the Obama White House said after a fresh review of Fed policy since World War Two. The Fed has raised its target policy rate by more than 4 percentage points in the last year, and “we are just now entering the window where the effects might start to be noticed,” Christina Romer, an economics professor at the University of California, Berkeley, and chair of the White House’s Council of Economic Advisers (CEA) from 2009 to 2010, told a national gathering of economists late on Saturday.