Dallas Fed Officer to Texarkana Execs: Mixed Recession Signals

Joseph S. Tracy, executive vice president of the Federal Reserve Bank of Dallas, told a roomful of Texarkana, TX executives that economic signals could indicate a coming recession, though the signals are mixed. Tracy, who is also adviser to the Dallas Fed’s president, made his comments at a luncheon at Texarkana’s Northridge Country Club, sponsored by Texas A&M University-Texarkana. He also indicated that his views were his own, and not official Dallas Fed positions.

His concern was that, with the long economic expansion, the U.S. should be in a budget surplus, rather than a growing deficit, which is the current situation. The deficit could be problematic if authorities need to intervene in a recession. Furthermore, “our interest rate is half of what it was, so there’s much less room to cut interest rates.” Tracy added that the mixed signals show a booming equity market, while the bond market is signaling an economic downturn.

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