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Federal Reserve Officials Call On New Trump Administration To Prepare For Next Downturn

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The Eccles Building, which houses the U.S. Federal Reserve in Washington, D.C.

Though the US economy is in reasonably good shape thanks to a solid labor market and robust GDP growth, Federal Reserve officials commented earlier this week on the importance of the incoming administration’s smart handling of fiscal policy, particularly in preparation for a future downturn.

New York Fed President William Dudley said that fiscal policy under a Trump presidency seems elusive at present, reiterating that future fiscal policy should be geared toward cushioning the next downturn, MarketWatch reports.

Dudley called for Congress to put stabilizers in place that would immediately go into effect should an economic downturn hit—such as extensions in unemployment compensation or payroll tax cuts. He said this would also take pressure off Fed Governors to have to implement unconventional monetary policy to stimulate economic growth in the event of another recession. [MW]