Fed continues to push for stimulus that boosts productivity:
Fed officials continue to be more open to discussing fiscal policy. Fed Chair Yellen said in testimony last month too soon to gauge potential impact given lack of details surrounding composition of any budget plans. However, there was some focus on her comments about how economy is operating relatively close to full employment now, unlike in the wake of the financial crisis. She also noted that there is not a lot of fiscal space to deal with an economic shock. Added Fed would likely to see fiscal policies focused on boosting productivity. Reutersdiscussed how more recent Fedspeak this week has conveyed a very similar message. Noted that Fed officials cautioned on Monday that Trump administration’s economic plans should be case if economy is in crisis, but instead be designed to boost economy’s long-term prospects. While Fed hopeful well-designed policies can boost lagging productivity, also worried overly aggressive measures could inflationary given economy’s current strength.