Yellen Only an `Uber-Dove” When Needed: Harris

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Oct. 10 (Bloomberg) -- Ethan Harris, co-head of global economics research at Bank of America, discusses what the Federal Reserve may look like under Janet Yellen and the potential economic damage of the government shutdown and looming debt ceiling limit. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Here and am hearing at the imf is janet yellen is anuberdove.

She has been a hawk before.

Wicks we need to remember she is been a -- she has been an uber dove.

She has focused on the going to plummet rate is the main goal.

You go back to the mid-90s when she was governor under alan greenspan she voted for a series of rate hikes.

At one point she even, according to larry myers, went to greenspan's office to ask for another hike.

That is not an uberdove, that is somewhat who fights inflation when inflation is the problem.

The backdrop is an ethan harris imf meeting.

You nailed slow economic growth.

When do we see growth pick up?

If you are to speak to christine lagarde, what would be your advice about the timeline to get the better economic growth?

I think like most people that we are kind of on the cusp of better growth.

The u.s. economy weathered a pretty nasty fiscal shock this year with slow growth, but no disaster.

The underlying private sector situation is improving.

It is really a question of whether washington is going to undercut this again.

That is the story of the day.

If they keep this up for a few more weeks, then they may actually not only undercut growth in the next few months, but also next year by creating this very deep uncertainty in the business community.

We are kind of, unfortunately, hostage to what goes on in washington right now.

We have maya mcginnis joining us, our guest host, the president of the committee for responsible budget on washington and the debt problems and on the federal reserve.

The fed has faced a little criticism that it is buying bonds, buying dead, and allowing congress to put this off, to put these decisions all.

D subscribe to that view?

I think what he said did it in a credibly challenging time for the country, so far seems to have helped immensely.

It did give, say but of the free pass.

I don't think you want to learn the lesson by not trying to save u.s. economy.

The problem is you have three things going on.

What the business sector can do to drive growth, which is a tremendous amount of they were not paralyzed.

Yet monetary policy, which had to compensate for broken policy.

And to get the equilibrium back, fiscal policy has to get back on track.

That will give one a terry policy a little more space.

-- that will give monetary policy a little more space.

You heard bernanke talk about this.

Ethan harris, is janet yellen and benjamin bernanke going to have to be bound and wait until something happens in washington before they can even dig about scaling this back?

My hope is this isn't that bad, that they reach an agreement around the time of hitting the debt ceiling.

I think getting an agreement and the next few days is going to be very difficult.

If they can get an agreement to extend the continuing resolution and the debt ceiling next week, then i think the damage is limited.

Then you -- it creates room for the private economy to do better.

We don't have to have a complete solution of washington, we just have to avoid the further escalation of the crisis.

Where is the nation's confidence right now?

The gallup poll indicator i saw was a plunge.

Where will we be in one month, three months, six months?

How do we get more confidence?

The tragedy in all of this is you can kind of see the economy digging his way out of the whole -- hole.

Confidence growing, that is still not back to normal.

That was before the crisis came up again.

Again, it is really a question of can we get the washington mess to be a small story instead of a big story?

If we do, we'll cover this come back?

The corporate sector has been way under investing, really not engaged.

What is really missing for them is confidence in the economy and in policy.

So if you can get them to feel better about the world, we are in a better place.

Ethan harris, get to work on the next book.

This text has been automatically generated. It may not be 100% accurate.

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