Fed’s Pianalto Says Education, Work Skills Spur Growth

Federal Reserve Bank of Cleveland President Sandra Pianalto said boosting U.S. living standards depends on Americans gaining a solid education and strong work skills, as well as access to credit and housing.

“Communities and regions will not see their living standards rise without having an ample share of residents who have good educations and strong workforce skills,” Pianalto said today in a speech in Cleveland. “Affordable housing and fair access to credit, as important as they are, are simply not sufficient to ensure strong communities.”

In an effort to cut borrowing costs such as mortgage rates, policy makers led by Fed Chairman Ben S. Bernanke decided at a June 19-20 meeting to extend a program known as Operation Twist, replacing $267 billion in short-term bonds with longer-term debt through the end of 2012. They also lowered their outlook for growth and employment.

Small-business lending, financial literacy, homebuyer education and other issues under Fed purview “will not be easily addressed” by the central bank, Pianalto said at the regional bank’s 2012 policy summit on housing. She didn’t discuss monetary policy.

Pianalto, 57, votes this year on the policy-setting Federal Open Market Committee this year. She has been president of the Cleveland Fed since 2003. She first joined the regional bank in 1983 as an economist in the research department.

To contact the reporter on this story: Jeff Kearns in Washington at jkearns3@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net