Federal Reserve Bank of Kansas City President Thomas Hoenig said he expects the U.S.’s long-term growth rate to be about 2.5 percent, trailing behind the average of more than 3 percent for the past 25 years, Dow Jones Newswires reported.
The forecast represents a significant drop in gross domestic product for coming generations, Hoenig said in a speech today in Kansas City, according to Dow Jones.
Hoenig, 65, steps down as the central bank’s longest-serving policy maker this week, after serving as a regional chief since 1991. He is departing from a divided Federal Open Market Committee that is grappling with the best way to support the recovery. The central bank’s decision last week to push down longer-term interest rates risks drew three dissenting votes, the second straight month that the most opposition within the group has been tallied in almost 19 years.
Hoenig, who doesn’t vote on the committee this year, voiced concern about the direction of the central bank’s policies because they encourage consumption and the build-up of debt, Dow Jones said.