Posted on 03/25/2011 12:17:00 PM PDT by NormsRevenge
NEW YORK, March 25 – With the economy on firmer footing the Federal Reserve Bank is unlikely to extend its bond-buying stimulus program beyond a planned $600 billion, several top Fed officials said on Friday.
Members of the more hawkish wing of the Fed went further, with Philadelphia Fed Bank President Charles Plosser saying the U.S. central bank will have to reverse its easy money policy in the "not-too-distant future" to avoid sowing the seeds of inflation.
The Fed has kept short-term rates near zero since December 2008 and has bought more than $2 trillion in long-term securities to push borrowing costs down further and boost recovery from the 2007-2009 recession.
At its most recent policy-setting meeting, policymakers voted to continue the bond-buying program begun last November and slated to end in June.
"Following through on that to the tune of $600 billion, like we've said, I think is appropriate," Chicago Fed President Evans told reporters at the regional bank's headquarters. "I personally don't see as many needs for a further amount, as I probably thought last fall."
Evans comments, along with those of Atlanta Fed President Dennis Lockhart who said on Friday that "it's a high bar" for the Fed to do more, suggest the debate at the Fed has moved away from a consideration of further easing.
"Given the pressure, from the hawks on the Federal Open Market Committee, the public, Congress, and foreign officials, I would highly doubt Evans would say something like that if Chairman Ben Bernanke, New York Fed President William Dudley, and Fed Vice Chair Janet Yellen didn't agree with him," said Eric Stein, a fund manager ..
Minneapolis Fed President Narayana Kocherlakota told reporters in Marseilles that the U.S. economy would need to worsen "materially" for the bank to consider further bond-buying.
(Excerpt) Read more at news.yahoo.com ...
You are right. Thank goodness for the internet.
I’m inclined to think these statements are trial balloons.
No QE3 means seriously jacking up interest rates. And that means they can no longer pretend that there is, or will be, a recovery. The truth will out.
OTOH, QE3 could mean the collapse of the dollar, unless the markets are willing to continue to pretend the Emperor has clothes, for at least a little longer.
That’s what these statements are designed to do, get an idea if QE3 will be accepted. It’s their first choice, the coward’s choice...as always.
Look at the dollar vs the euro. The euro is a piece of crap currency and it continues to strengthen against the dollar.
That’s like getting beaten up by a 97 lb weakling.
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