A top policymaker of the U.S. central bank expressed his dissatisfaction with the Federal Reserve’s newest round of monetary stimulus during a speech at the University of Virginia on Friday.
Richmond Federal Reserve Bank President Jeffrey Lacker said he doesn’t believe the Fed stimulus will do much to boost the struggling U.S. economy – at least not without also causing a dangerous rise in inflation.
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Lacker is an outspoken critic of the Fed’s recent bond-buying strategy – which involves the purchasing of $40 billion in mortgage-backed securities each month – and doesn’t believe it can help the economic situation. Lacker maintains inflation ought to be a greater concern than it currently is, and he denounced the Fed’s latest guidance on interest rates, which anticipates keeping rates very low until at least some time in 2015.
“Such language could be misinterpreted as suggesting a diminished commitment to keeping inflation at 2 percent,” Lacker said. “I would oppose adopting such a stance.”
Lacker’s laundry list of complaints didn’t end there. He also voiced his lack of confidence in the recent U.S. financial reforms, stating that in his estimation the new legislation fell short of its goal. “I do not think that Dodd-Frank has provided us with a stable and sustainable framework for regulating the financial sector,” he said.
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