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Fed ‘hawks’ speak up
Several policymakers at the U.S. Federal Reserve said they had doubts that a new round of bond buying would give the economy a significant boost.
Dallas Fed President Richard Fisher, Philadelphia Fed President Charles Plosser and Kansas City Fed President Esther George have each spoken up against stimulus measures recently, The Wall Street Journal reported Thursday.
“Is there anyone not borrowing today or purchasing a house because interest rates aren”t low enough?” the Kansas City Star quoted George as saying recently.
Using a stimulus measure known as quantitative easing, the Fed has twice attempted to keep borrowing rates low, as a high demand for bonds works to reduce interest rates.
There have been disagreements before among the Fed”s 12 regional bank presidents and the seven board members that make up the Open Market Committee. Opposition, however, has not been strong enough to prevent two previous rounds of bond-buying.
The committee has approved other stimulus programs before despite the “inflation hawks” who worry that stimulus programs will prompt hard-to-control inflation.
Fed Chairman Ben Bernanke may provide clues as to his opinion on the issue during his annual speech in Jackson Hole, Wyo., on Aug. 31. Boston Fed President Eric Rosengren recently spoke out in favor of a new round of bond-buying to give stock markets a boost.
In its last official policy statement, the Fed said it was prepared to act and would “provide additional accommodation as needed.”
Copyright 2012 by United Press International