Fed’s Plosser Suggests Data over Schedules in Policy Communication

The Federal Reserve should ditch all references to dates in its policy statement and instead base decisions on economic data, particularly inflation, a top Fed policymaker said on Friday.

Charles Plosser, who will step down as head of the Philadelphia Fed on March 1, also called on the central bank to submit policy reports to lawmakers more regularly. And he repeated that Congress should cut unemployment from the Fed’s official mandate, so that it could focus solely on inflation.

The Fed’s recent policy statements “have increasingly given the impression that it wants to achieve an employment goal as quickly as possible through aggressive monetary accommodation,” Plosser told a conference of the Society of American Business Editors and Writers.

The speech by Plosser, a hawkish official who dissented against the last two Fed policy decisions, cut to the internal debate at the central bank over how to refine the language it uses to telegraph when interest rates will finally rise.

As it stands, the Fed says it will wait a “considerable time” after this month to tighten, saying in the statement there is yet a “significant” amount of wasted labor resources.

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