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She said the rate increases, intended to restrain inflation, might be contributing to an economic slowdown.
One worry is that the Bundesbank might use national tools (eg, raising bank-capital requirements) to restrain inflation.
Its budget may restrain inflation but will hardly dent unemployment, raise living standards or make up for years of underinvestment.
That's because once the economy returned to the target path, Fed policy — a commitment to ensuring nominal G.D.P. growth of 4 1/2 percent — would restrain inflation.
The continued strength of the dollar has made that decision easier for him, by keeping import prices low and hence helping to restrain inflation.
The Federal Reserve, on the other hand, believes it has a mandate to restrain inflation, and that often means keeping credit tight.
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That restrains inflation, but it can also slow the economy.
Traditionally, the Fed has focused on restraining inflation, not stoking it.
The government has stimulated growth by restraining inflation, mainly by depressing workers' wages.
Still, until today, bank officials insisted that they were more worried about restraining inflation.
For more than a year, the Chinese central bank tried to squeeze the country's banking system in hopes of restraining inflation.
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