George, of the Fed, says that we have to wait and see to adopt a policy

NEW YORK (Reuters) – The US economy is facing "significant" risks, and the Fed may be adopting a wait-and-see policy stance, said Esther Esther George, president of the Kansas City Federal Reserve.

"In the medium term, I think the slowdown in growth abroad, especially in China, the eurozone and the UK, is the biggest risk," George said at a news conference. speech prepared at an event in New York.

George said the fundamentals of the US economy were still sound and that job growth would likely resume after a poor performance in February.

"The downside risks, however, are significant as I expect growth to slow, with moderate employment gains and low inflation," she said. "Under these circumstances, monetary policy may adopt a wait-and-see approach."

George said that she supported the Fed's plans to review the monetary policy strategy this year. She said some of the proposed changes to her framework had benefits, including proposals for the Fed to commit to catching up with its lower inflation years for the goal.

At the same time, she listed a number of reasons why such a framework might not work or even harm the economy.

"I see both fundamental and practical problems in moving to such regimes," said George.

However, George said that it would be reasonable for the Fed to authorize "even somewhat persistent" deviations from its 2% inflation target.

"They're limited to, say, 50 basis points above or below the goal (they) may be acceptable, depending on broader economic conditions," George said.