May 28, 2012 / 9:28 PM / 7 years ago

Fed's Plosser says U.S. to withstand euro fallout: WSJ

Philadelphia Federal Reserve President Charles Plosser speaks at an Economics21 event in New York, March 25, 2011. Plosser said the earthquake and nuclear crisis in Japan and the rise in oil prices because of turmoil in the Middle East pose a risk to the U.S. recovery but said he expected this risk to be small and short-term. REUTERS/Brendan McDermid

(Reuters) - The United States is well poised to withstand any fallout from Europe’s escalating debt crisis, a top Federal Reserve executive told the Wall Street Journal.

Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said the United States should comfortably weather the debt crisis because its financial institutions have already cut their European exposure. Moreover, he said on the Journal’s Monday online edition that “a flood of liquidity” into the United States, as investors seek safer assets, is more likely “than the drying up of liquidity.”

Uncertainty in Europe might even help the U.S. economy in the short run by pushing down U.S. interest rates and energy prices, Plosser said in an interview, conducted in Eltville, Germany.

Reporting By Ransdell Pierson; Editing by Kenneth Barry

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