Fed's Poole says chances of recession remote

The likelihood of the US sliding into a 'double-dip' recession in the US is low, according to the president of the St Louis Federal Reserve bank.

The likelihood of the US sliding into a 'double-dip' recession in the US is low, according to the president of the St Louis Federal Reserve bank.

Speaking to the Midwestern States Association of Tax Administrators, William Poole noted that there's only been one double-dip recession since World War Two. The short 1980 recession was followed by a four-quarter recovery and then by the deep 1981-82 recession.

He added that the climate that spawned that double-dip - high and rising inflation, poor public policies and a major oil shock - is absent this time.

"Expectations of low and stable inflation are entrenched, and the banking system is well-capitalised, making credit readily available to credit-worthy firms," he said.

"Hence, barring and unpredictable calamity, I think the probability of a double-dip recession at the present time is low," he said.

Poole also said the economic recovery does not depend on the exact timing of policy adjustments by the Federal Open Market Committee.

"That's an unreasonable standard to apply to judging the FOMC, and fortunately not at all necessary," he said. "As I have repeatedly emphasised, one of the great benefits of achieving low and stable inflation is that this environment makes the economy less sensitive to the exact timing of policy adjustments."

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