Little over a week after U.S. Federal Reserve policymakers overwhelmingly endorsed a plan to keep buying bonds to spur economic growth and hiring, they are airing their differences over their super-easy policy.
“I think we should try as hard as we can” to turn things around, Chicago Federal Reserve Bank President Charles Evans said in an interview on Bloomberg TV, in a forceful defense of the bond-buying program, known as QE3 because it is the Fed’s third round of quantitative easing since the Great Recession.
Crediting QE3 for a “definitely” improved labor market, he said the Fed should not back away from the program. “I’d like to have confidence we can sustain that improvement in the labor market through this summer,” he said.
Though the U.S. central bank renewed its commitment last week to buy $85 billion in bonds per month and to keep rates low for some time to come, weaker inflation on the one hand and a steady drop in unemployment on the other have investors anxiously guessing when monetary policy will shift.
Philadelphia Fed President Charles Plosser, a policy hawk and unlike Evans not a voting member of the Fed’s policy committee this year, took the opposite tack and called the effects of the bond-buying program “dubious.
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