The economy has improved in the last six months, signaled by greater consumer spending, durables purchases and some signs of increased investment, Daniel K. Tarullo, Federal Reserve governor, told CNBC Friday, echoing the optimism of his boss, Chairman Ben Bernanke, who was projecting growth on Thursday,
“That has reinforced the sense that we’re going to have to slightly-above-trend growth going forward and that it’s a firmer imbedded growth than may have been apparent six months ago,” said Tarullo, who is President Obama’s first Fed appointee.
Tarullo held several senior roles in the Clinton Administration, including Assistant Secretary of State for Economic and Business Affairs. Before joining the Fed, he taught courses in international financial regulation, international law and banking law at the Georgetown University Law Center.
Tarullo noted also that unemployment and housing continue to be problems as does the threat from Europe’s stumbling economies. “I think until we get to the point where jobs are created at a consistent and continuing pace that will bring down unemployment, there is going to be an inherent lack of robustness in the economy,” he added.
The Fed governor said he didn’t expect inflation now or in the future. He also said that the recent upswing in interest rates “has reflected increasing economic prospects. In some important respects, the increase in the real rates has been a salutary consequence of the additional large-scale asset purchases, which we announced in November, but were foreshadowed by Chairman Bernanke in August.”