Fed’s Lacker Identifies Himself as the MBS Approach Dissenter

Richmond Federal Reserve President Jeffrey Lacker on Friday identified himself as the lone dissenter on the Fed’s so-called exit strategy, and said his opposition stemmed from the central bank’s plan to keep holding mortgage-backed securities.

Lacker has previously opposed the Fed’s purchase of mortgage-backed securities (MBS) because he feels it singles out a certain sector and gives it an advantage over other borrowing by consumers.

The Fed announced on Wednesday a new set of plans related to whittling down its $4.4 trillion balance sheet, built up through three large-scale bond buying programs.

 
The strategy, known officially as “Policy Normalization Principles and Plans”, outlined various steps it will take in moving away from the loose policy that has been in place since late 2008. The policy-setting Federal Open Market Committee (FOMC) said all but one of its participants agreed with the approach.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza