03:15 GMT +319 October 2019
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    A Federal Reserve police officer keeps watch while posted outside the Federal Reserve headquarters in Washington September 16, 2015

    Fed Has Limited Number of Tools to Address Possible US Economic Downturn

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    The US Federal Reserve is constrained in the number of ways it can address economic challenges in the United States, Federal Reserve Chair Janet Yellen said on Friday.

    WASHINGTON (Sputnik) — Yellen also underscored that greater scope for fiscal policy might be needed in the future to address the US economic weakness.

    "We have limited scope for responding [to economic weakness]," Yellen stated in a speech at Harvard University in Boston.

    The Federal Reserve Chair explained that current tools to stimulate the US economy include purchases of longer-term assets and provision of forward guidance, which serve to assure the public about intended monetary policies.

    Yellen noted that the Federal Reserve considered negative interest rates as a tool, employed by other economies, but only briefly.

    "We were concerned at the time that there could be a number of negative repercussions… to lowering to zero or negative territory," she added.


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