We still have ammunition

  • Bryan Corliss / Herald Writer
  • Thursday, November 15, 2001 9:00pm
  • Business

By Bryan Corliss

Herald Writer

SEATTLE — The Federal Reserve has room to cut interest rates even further, if that’s what’s needed to jump-start the post-Sept. 11 economy, the president of the Federal Reserve Bank of San Francisco said Thursday.

"If further action is required, I’m sure we have the capability to do that," said Robert Parry, a nonvoting member of the Fed’s interest rate-setting Open Market Committee.

"We still have ammunition," he said. "I don’t see us running out of it."

But the Fed already has lowered interest rates 10 times this year, he noted. "It isn’t going to be long before the effects of that begin to work in a very positive way."

Parry spoke at a breakfast lecture sponsored by the University of Washington Business School.

The Sept. 11 attacks "struck while we were vulnerable, pushing us from sluggish growth to an outright contraction," Parry said. "Frankly, over the short-term, the outlook isn’t great and there’s a lot of uncertainty."

But long-term, the U.S. economic outlook is good, Parry said. "Our economy is fundamentally strong and it still affords tremendous opportunity."

Parry declined to set a timetable for recovery. But it’s certainly a possibility that the nation will see "declining output" — or a recession — for the first three to six months of 2002. Unemployment rates will continue to rise, Parry predicted.

But the combination of the Fed’s interest rate cuts, this summer’s federal income tax cuts, the government’s emergency spending after the attacks and the economic stimulus under debate in Congress "should make economic activity rebound," Parry said.

Those measures will pump about $160 billion into the economy next year, he said.

At the same time, oil and natural gas prices are falling, and that also will put more money in the hands of consumers.

The Northwest won’t lag behind other parts of the country when the economic recovery starts, Parry said.

Several regional economists have predicted that it will, given that Boeing will have laid off about 20,000 Puget Sound area workers by the middle of next year.

But Parry said he believes when the turnaround comes, it will spur companies to start investing again in technology and software, which will resuscitate the Northwest high-tech industry.

And as business activity increases, travel will, too, and that will help Boeing, he said.

"It’s tough now. It’s going to be tough for some period of time," Parry said. But long-term, there’s no reason not to be positive about the economic future of Puget Sound, he said.

You can call Herald Writer Bryan Corliss at 425-339-3454

or send e-mail to corliss@heraldnet.com.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

A closing sign hangs above the entrance of the Big Lots at Evergreen and Madison on Monday, July 22, 2024, in Everett, Washington. (Ryan Berry / The Herald)
Big Lots announces it will shutter Everett and Lynnwood stores

The Marysville store will remain open for now. The retailer reported declining sales in the first quarter of the year.

George Montemor poses for a photo in front of his office in Lynnwood, Washington on Tuesday, July 30, 2024.  (Annie Barker / The Herald)
Despite high mortgage rates, Snohomish County home market still competitive

Snohomish County homes priced from $550K to $850K are pulling in multiple offers and selling quickly.

Henry M. Jackson High School’s robotic team, Jack in the Bot, shake hands at the 2024 Indiana Robotics Invitational.(Henry M. Jackson High School)
Mill Creek robotics team — Jack in the Bot — wins big

Henry M. Jackson High School students took first place at the Indiana Robotic Invitational for the second year in a row.

The computer science and robotics and artificial intelligence department faculty includes (left to right) faculty department head Allison Obourn; Dean Carey Schroyer; Ishaani Priyadarshini; ROBAI department head Sirine Maalej and Charlene Lugli. PHOTO: Arutyun Sargsyan / Edmonds College.
Edmonds College to offer 2 new four-year degree programs

The college is accepting applications for bachelor programs in computer science as well as robotics and artificial intelligence.

FILE — Boeing 737 MAX8 airplanes on the assembly line at the Boeing plant in Renton, Wash., on March 27, 2019. Boeing said on Wednesday, Feb. 21, 2024, that it was shaking up the leadership in its commercial airplanes unit after a harrowing incident last month during which a piece fell off a 737 Max 9 jet in flight. (Ruth Fremson/The New York Times)
Federal judge rejects Boeing’s guilty plea related to 737 Max crashes

The plea agreement included a fine of up to $487 million and three years of probation.

Neetha Hsu practices a command with Marley, left, and Andie Holsten practices with Oshie, right, during a puppy training class at The Everett Zoom Room in Everett, Washington on Wednesday, July 3, 2024. (Annie Barker / The Herald)
Tricks of the trade: New Everett dog training gym is a people-pleaser

Everett Zoom Room offers training for puppies, dogs and their owners: “We don’t train dogs, we train the people who love them.”

Andy Bronson/ The Herald 

Everett mayor Ray Stephenson looks over the city on Tuesday, Jan. 5, 2015 in Everett, Wa. Stephanson sees  Utah’s “housing first” model – dealing with homelessness first before tackling related issues – is one Everett and Snohomish County should adopt.

Local:issuesStephanson

Shot on: 1/5/16
Economic Alliance taps former Everett mayor as CEO

Ray Stephanson will serve as the interim leader of the Snohomish County group.

Molbak's Garden + Home in Woodinville, Washington will close on Jan. 28. (Photo courtesy of Molbak's)
After tumultuous year, Molbak’s is being demolished in Woodinville

The beloved garden store closed in January. And a fundraising initiative to revitalize the space fell short.

Everett Mayor Cassie Franklin, Advanced Manufacturing Skills Center executive director Larry Cluphf, Boeing Director of manufacturing and safety Cameron Myers, Edmonds College President Amit Singh, U.S. Rep. Rick Larsen, and Snohomish County Executive Dave Somers participate in a ribbon-cutting ceremony on Tuesday, July 2 celebrating the opening of a new fuselage training lab at Paine Field. Credit: Arutyun Sargsyan / Edmonds College
‘Magic happens’: Paine Field aerospace center dedicates new hands-on lab

Last month, Edmonds College officials cut the ribbon on a new training lab — a section of a 12-ton Boeing 767 tanker.

Gov. Jay Inslee presents CEO Fredrik Hellstrom with the Swedish flag during a grand opening ceremony for Sweden-based Echandia on Tuesday, July 30, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Swedish battery maker opens first U.S. facility in Marysville

Echandia’s marine battery systems power everything from tug boats to passenger and car ferries.

Helion Energy CEO and co-founder David Kirtley talks to Governor Jay Inslee about Trenta, Helion’s 6th fusion prototype, during a tour of their facility on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
State grants Everett-based Helion a fusion energy license

The permit allows Helion to use radioactive materials to operate the company’s fusion generator.

People walk past the new J.sweets storefront in Alderwood Mall on Thursday, July 25, 2024, in Lynnwood, Washington. (Olivia Vanni / The Herald)
New Japanese-style sweets shop to open in Lynnwood

J. Sweets, offering traditional Japanese and western style treats opens, could open by early August at the Alderwood mall.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.