Plosser and his allies argue that the most the Fed can expect to accomplish, over time, is to help control bond yields and price levels by influencing interest rates. When prices are stable, the economy grows steadily and jobs appear, they say.The Republicans elected to Congress for the first time this month include some Fed critics, such as Sen.-elect Rand Paul (R., Ky.), who broadly oppose Fed chairman Ben Bernanke's fix-it policies and the Fed's independence.
Plosser has been a persistent but respectful critic of Fed intervention. He will rotate onto the Fed's top board as a voting member early next year.
With criticism of the Fed growing, is Plosser preparing to raise his profile as a Bernanke critic? He's planning a speech Thursday afternoon at the libertarian Cato Institute in Washington, titled "Bubble, Bubble, Toil and Trouble: A Dangerous Brew for Monetary Policy." More in my column in today's Inquirer here.