U.S. Federal Reserve Board said on Tuesday ready to evaluate and potentially, massive monetary stimulus, the former Fed officials, who was the Fed's bond-buying program the key to change.
In order to combat the financial crisis, the Fed short-term interest rates down to zero at the end of 2008, since more than 2.5 trillion U.S. dollars to buy bonds in order to strengthen the economic recovery has been weak. Financial markets have become more and more at the edge of the expected, the Fed is ready to start rolling their stimulus.
Dallas Federal Reserve Bank President Richard Fisher said: "Now the plot thickens." He likened the Fed's monetary policy developments, starring "bold captain to Shakespeare's play," Fed Chairman Ben Bernanke, maneuvering of the ship U.S. economy.
"Act IV has just begun, will involve introspective drama, the Federal Open Market Committee to assess the effectiveness of its sailing tactics, and, perhaps, fine tuning them, if you do not change the process," Fisher said the Fed's policy Federal Open Market Committee in the preparation of the delivery CD Howe Institute in Toronto directors dinner remarks.
"Only time will reveal the effectiveness of existing policies and I more experienced observers, such as Paul Volcker worry whether the risks are substantial, as we speculate, or we have made much ado about nothing," he added. Volcker was Fed chairman, 1979-1987.
Currently the Fed's bond-buying program, the Fed's third round of quantitative easing, known as QE3 Fisher is a long-term critic. He argued that it has done little to help the economy risks doing great harm.
Last week, Volcker, who led the U.S. central bank actively fight inflation, but also sounded the alarm QE3, said the central bank in the elimination of stimulation, often too late.
Fisher did not repeat his call on Tuesday, most recently last month, the central bank immediately cut $ 8.5 billion dollars a month to buy bonds, but he also reiterated his concerns.
Although the opportunity to "very low", monetary policy will contribute to inflation than the Fed's 2% target, this year, the bond purchase program was, "at best, pushing on a string, in the worst case, fire and building speculation, and ultimately , a huge fire on board inflation, "he said.
U.S. fiscal policy uncertainty is to keep businesses employ He added that the Fed's ultra-loose policy powers denied.
Even so, recent job growth and retail sales, proposes to restore strong enough "to promote employment growth in consumption will help to gradually improve the long-term hope," Fisher said.
Unemployment is expected to remain at 7.5%, when the U.S. government announced in May non-farm payrolls report on Friday.
Bernanke said last month that the central bank would need to see before easing its monetary stimulus further traction signs, but also said that the decision to do so may be made that the Fed's "over the next few meetings," one look to set the gain if the economy momentum.
 



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