Philly Fed President Plosser Remains Critical of QE3 But Says Fed Can Still Do More
Philadelphia Federal Reserve President Charles Plosser created waves this week when he came out and spoke about the risks to the Federal Reserve's credibility due to the latest round of quantitative easing. The words were not exactly expected and that coincided with increased anti-austerity protests in Europe to put the markets in a tail spin.
We will leave it up to as to whether or not Mr. Plosser was asked or told to hold his tongue perhaps just a bit. He is out making the media rounds today with some comments that are still cautious but conciliatory in that he said the FOMC is watching the situation in Europe and is prepared to act further if needed.
Earlier today he had a Bloomberg interview noting that policy makers are monitoring Europe's debt crisis and that the governors are prepared to act if the situation spreads outside of Europe. This coincided with Spain's 2013 budget approval showing more cuts and fewer benefits.
Plosser did reiterate that he is not expecting that the new round of bond buying will boost growth and hiring. He also reiterated the credibility risk. Now more comments have been out by Dow Jones on a DJ/WSJ interview that the FOMC will face a pushback when it comes time to tighten and also that the FOMC is aware that a weaker dollar can represent stimulus.
JON C. OGG
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