US FED: Kohn - Fed Will Do What's Necessary, Eyes H2 Pickup Tuesday, February 26, 2008 12:25:00 PM Boston, February 26. Fed vice chairman Don Kohn says monetary policy works with a lag and that a second half recovery is likely, though adverse risks abound. He concludes, "we will see a return to stronger growth, lower unemployment, lower inflation and improved flows in financial markets, but it probably will take a little while." Kohn says (quoting Bernanke) that the Fed will apply monetary policy as required to address both growth and inflation risks. He says inflation expectations remain well anchored and that current elevated readings will moderate. Kohn also credits the weaker dollar for stronger trade position. The dollar index is of 45 pips or 0.6% today, as strong PPI confirmed nearby inflation threats that will worsen in the wake of cheaper funds rate. After making these comments to the assembled press, Kohn was heard off-stage saying "Ben, pass me that pipe."