DALLAS – Federal Reserve Bank of Dallas President Robert McTeer said on Friday the U.S. central bank was focused mainly on beating back a recession rather than combating inflation.
McTeer, speaking to a business group in Dallas, said the slowing U.S. economy seemed to be holding up fairly well and the weakness was limited mainly to the manufacturing sector.
``Under the current circumstances, I personally think we need to put concerns about inflation on the back burner for awhile and save the economy from the ``R'' word,'' McTeer said. ''Inflation is still around,'' he added.
``The economy so far seems to be holding up. What we've got is a severe slowdown to contraction in the goods manufacturing sector, but not in services,'' he said.
McTeer said that consumer sentiment has fallen sharply but consumer spending so far has not. ``So we've got a severe problem restricted to part of the economy that we hope does not spread to the broader economy.''