Sheila Blair Urges Congress to Act not the Fed

Additional easing from the Federal Reserve won’t result in more bank lending, Sheila Bair, the former chair of the Federal Deposit Insurance Corp., told CNBC’s “Squawk Box” on Monday.

“If I had any confidence [that] it would help lending support real economic activity, I would say go for it, but there are significant risks,” Bair said.

She said central banks have become the only game in town in both Europe and the U.S., but “QE is not resulting in more lending.”

Instead of the Federal Reserve, Bair said it’s Congress that should be working on policies to address unemployment and the country’s fiscal issues.

Without congressional action, the Fed is in a difficult position, Bair noted, adding “I don’t think QE3 is going to help, and I think there’s a risk to it.”

Bair worries about inflation and “the Fed’s ability to control the interest rate environment when that happens.”

via CNBC

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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