Fed lacks power to deal with next US contraction: economist

London

THE US economy is driving along without much insurance for when it crashes. Almost six years since the bottom of the last recession, the world's largest economy lacks the monetary and fiscal power to reverse the next contraction as threats to sustained growth build.

"We're probably closer to the next recession than we are to the last one," Stephen King, chief global economist at HSBC Holdings Plc in London, said.