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WASHINGTON: Stanley Fischer, nominated as vice chair of the Federal Reserve, said Wednesday that the US economy still needs stimulus to help bring down stubbornly high unemployment.
In a prepared statement for a confirmation hearing scheduled at the Senate on Thursday, Fischer lined up behind new Fed Chair Janet Yellen on monetary policy, saying inflation remained tame and the economy had not returned to normal in the wake of the deep 2007-2009 recession.
"Normalcy has not been restored. At 6.7 percent, the unemployment rate remains too high, and the rate of inflation has been, and is expected to remain, somewhat below the Federal Reserve's target of 2 percent," he said in the statement.
"At present, achievement of both maximum employment and price stability requires the continuation of an expansionary monetary policy -- even though the degree of expansion is being gradually and cautiously cut back."
Fischer, a dual US-Israeli citizen who until last year served as the governor of Israel's central bank, praised the Fed's response to the crisis, under the lead of just-departed chief Ben Bernanke, as "courageous and effective".
"Nonetheless, we must do everything we can to prevent the need for such extreme measures ever again," he said, declaring strong support for the Dodd-Frank and other financial sector regulation crafted in the wake of the crisis.
"The Great Recession has driven home the lesson that the Fed has not only to fulfill its dual mandate, but also to contribute its part to the maintenance of the stability of the financial system," he said.
Fischer is scheduled to appear Thursday morning before the Senate Banking Committee, which is expected to easily endorse his nomination.
Also appearing at the hearing for confirmation to the Fed board will be former Treasury official Lael Brainard and Jerome Powell, a Fed governor up for renewal.
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