The Federal Reserve's second-in-command was the latest to wade into a post-election debate over what policies the new U.S. government should pursue, saying on Monday spending and other efforts to boost sluggish productivity could help reduce the Fed's burden of supporting the economy.
"Certain fiscal policies, particularly those that increase productivity, can increase the potential of the economy and help confront some of our longer-term economic challenges," said Fed Vice Chair Stanley Fischer.
"Some combination of improved public infrastructure, better education, more encouragement for private investment, and more effective regulation all likely have a role to play in promoting faster growth of productivity and living standards," he said at the Council on Foreign Relations.
Fischer's remarks come nearly two weeks after Americans shocked pollsters by electing as president Republican Donald Trump, who campaigned on a platform of infrastructure spending, tax cuts, and renegotiated or canceled international trade pacts.
The economy, eight years after the worst of the recession, is now in "the vicinity" of the U.S. central bank's employment and inflation goals, Fischer said, adding it was performing "reasonably well."
In his prepared remarks, Fischer did not elaborate on the regulations or private investments to which he was referring. But he said fiscal adjustments could support years of accommodative monetary policy, and he endorsed economist Mohamed El-Erian's description in his book of the Fed as almost the "only game in town."