In spite of the shaky steps the economy has been given in its way to recovery, improvements in employment and the real estate market surpassed expectations, said Federal Reserve Bank of Kansas City President, Esther George.
“Regarding the job market, the pace of improvement has been well above what we expected,” George said Tuesday in a speech at the University of Nebraska-Omaha.
“The housing market certainly still has a long road ahead of it,” said George. “But it is starting to heal faster than we expected.”
The Fed, George added, may prompt instability in financial markets when it eventually begins to sell assets from its record balance sheet.
“The Federal Reserve current plan for selling securities could be disruptive to market functioning” and cause “an unwelcome rise in mortgage interest rates,” George said.
Last month, during her first meeting as a voting member of the Federal Open Market Committee, George opposed the decision to press on with $85 billion in monthly bond purchases aimed at spurring growth and reducing unemployment.
In her defense, she expressed concerns that “the continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations.”
