TUCSON, Ariz. -- The Federal Reserve's objective in raising interest rates is to avoid the pitfalls of the late 1970s and early 1980s, said Robert Parry, president of the Federal Reserve Bank of San Francisco.
Back then, the central bank had to push interest rates to double-digit levels to control inflation.
Speaking to reporters in general terms, Mr. Parry, who votes on the Federal Open Market Committee, discussed the difficulty of acting in anticipation of fast economic growth. "There are times when the Fed has to take action to slow the growth of the economy, because once it's moving it is harder to get a hold of it," he said.
Mr. Parry said he believed the Fed has the support of the Clinton administration in its efforts to control inflation, but said the pressure on the Fed increases as rates continue to rise.
In a speech Thursday, Mr. Parry said the low real level of interest rates, as adjusted for inflation, continues to stimulate the economy, and he expects a 3% growth rate for 1994.