Fed Members Concerned about End of QE

Days after Ben Bernanke signaled a gradual end to the Federal Reserve’s stimulus efforts, his colleagues are chiming in with concerns.
Did the Federal Reserve chairman go too far when he said that the central bank plans to reduce its stimulus buying later this year? Or did he leave out some important details?

Dallas Fed President Richard Fisher spoke out Monday, urging investors not to act like “feral hogs” by overreacting. In the past, Fisher has largely criticized the Fed for taking stimulus too far, but even he is now trying to calm markets, stressing that the wind-down process will be a gradual and cautious one.
“I don’t want to go from Wild Turkey to ‘cold turkey’ overnight,” he told the Financial Times.

Another Fed official wants ‘extraordinarily low’ short-term interest rates for longer: In an unusual move, Minneapolis Fed President Narayana Kocherlakota issued a statement Monday criticizing the central bank for not issuing clearer guidelines on its plans for short-term interest rates, which have been at historic lows since December 2008.

via CNN

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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