Fed Nominee Backs Rate Cuts
WASHINGTON -- Federal Reserve Board nominee Susan Phillips said slow growth in the M2 money supply aggregate is "quite disturbing" and the Fed's recent interest rate cuts were appropriate to increase money and credit growth.
In written answers to questions from the Senate Banking Committee, which approved her nomination Wednesday on a routine voice vote, Ms. Phillips said the M2 trend does not reflect current and prospective rates of economic growth because households may be moving money into instruments not included in that monetary measure.
She called deteriorating consumer confidence "quite worrisome" but noted that consumers had increased their spending this year and have been spending large portions of their income.
"This observation suggests to me that one key to increasing consumer spending will be enhancing the thrust to job and income creation across the country," Ms. Phillips wrote.