Jeffrey Lacker lays out rationale for why he doesn’t agree with pledging to keep interest rates low for at least two more years. He also foresees the U.S. economy continuing to improve.
Originally from MarketWatch
Jeffrey Lacker lays out rationale for why he doesn’t agree with pledging to keep interest rates low for at least two more years. He also foresees the U.S. economy continuing to improve.
Originally from MarketWatch
Jeffrey Lacker lays out rationale for why he doesn’t agree with pledging to keep interest rates low for at least two more years. He also foresees the U.S. economy continuing to improve.
Originally from MarketWatch
FRANKFURT (MarketWatch) -- Richmond Federal Reserve Bank President Jeffrey Lacker on Friday said he dissented from the Federal Reserve's announcement earlier this week that it intends to keep interest rates near zero until late 2014 because he expects economic activity to prompt an earlier rate rise. "I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for so long," Lacker said in a statement posted on the Richmond Fed website. "I expect that as economic expansion continues, even if only at a moderate pace, the federal funds rate will need to rise in order to prevent the emergence of inflationary pressures. This increase in interest rates is likely to be necessary before late 2014," he said. Lacker was the only member of the Federal Open Market Committee to vote against the Fed policy action, citing a desire to omit the reference to the time period.
Originally from MarketWatch
RICHMOND (MarketWatch) - The surprising 200,000 net gain in December payrolls was "a heartening sign of a potential firming trend," said Richmond Federal Reserve Bank President Jeffrey Lacker on Friday. In a speech to financial service professionals, Lacker said he expects only modest improvement in the economy in 2012, with economic growth expanding at a 2.0 to 2.5% pace. Lacker said the inflation outlook is "reasonably good right now" but said the risks were "tilted to the upside." Still, there is a chance that inflation could fall well below the Fed's implicit target of 2%, especially if global growth should soften enough to ease pressure on commodity prices. Lacker noted that the U.S. economy is now running on a lower-trend line than the 3% growth trend rate that persisted over the last century and a half. The over-built housing market "tops the list" of factors hampering the recovery, he said. And while much progress has been made in adjusting to the post-financial-crisis environment, the housing market still has "substantial adjustment" ahead.
Originally from MarketWatch
CHARLOTTE (Reuters) - The Federal Reserve is unlikely to need to ease monetary policy further given the country's steady if moderate pace of economic growth, Richmond Fed President Jeffrey Lacker said on Monday.
Originally from Reuters: Business News
CHARLOTTE (Reuters) - The Federal Reserve is unlikely to need to ease monetary policy further given the country's steady if moderate pace of economic growth, Richmond Fed President Jeffrey Lacker said on Monday.
Originally from Reuters: Business News
WASHINGTON (MarketWatch) -- Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Wednesday suggested that the central bank's balance sheet should be restricted to U.S. Treasurys. "While it might sound extreme, I believe that a regime in which the Fed is restricted to hold only U.S. Treasury securities purchased on the open market is worthy of consideration," Lacker said in a speech at the Cato Institute, a libertarian think tank. Lacker said that the ability of a central bank to intervene in credit markets creates "an inevitable tension" because the Congress and White House will want to provide government assistance to credit market participants. But this is "fiscal policy" outside the safeguards of the constitutional process, Lacker said. "Central bank lending is often the patch of least resistance in a financial crisis," Lacker said. "The resulting political entanglements, as we have seen, create risks for the independence of monetary policy," he said. Since the financial crisis in 2008, the Fed purchased $1.45 million of mortgage-backed securities and debt of Fannie Mae and Freddie Mac to support the housing market.
Originally from MarketWatch
SALISBURY, Maryland (Reuters) - The Federal Reserve's latest effort to push down long-term borrowing costs is likely to push inflation higher with little benefit to economic growth, a top central bank official said on Monday.
Originally from Reuters: Business News
WASHINGTON (MarketWatch) - Richmond Federal Reserve Bank President Jeffrey Lacker said Monday that he does not support the central bank's Operation Twist move to help to recovery. "My sense is that the main effect will be to raise inflation somewhat rather than increase growth," Lacker said in a speech to a business group in Salisbury, Md. Lacker said he was more worried than most economists about inflation, saying he doubts it will fall much below 2% for a sustained period. Lacker also said he did not support the Fed's decision to reinvest proceeds from maturing agency mortgage-backed securities into the agency MBS market. Previously, the Fed had reinvested the proceeds into Treasurys. "It is simply inappropriate, in my view, for a central bank to channel credit toward some economic sectors and away from others," Lacker said. The growing dissent at the Fed is "no cause for alarm," Lacker said. Economic policymakers can disagree just like Supreme Court justices can disagree, he said.
Originally from MarketWatch
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