Saturday, February 28, 2015

Philly Fed's Plosser opposes QE3, worries it will be ineffective

The head of the regional Federal Reserve bank expressed his concerns about the central bank's latest efforts to stimulate the economy in a speech in Philadelphia Tuesday.

Philly Fed's Plosser opposes QE3, worries it will be ineffective

Federal Reserve Bank of Philadelphia president Charles Plosser said in a speech Tuesday that he does not think that monetary policy can "do much to speed up the slow progress" in the labor market.

According to prepared remarks for a speech before the CFA Society of Philadelphia and Bond Club of Philadelphia, Plosser discussed the Fed's latest round of stimulus, known as QE3, and said he opposed the actions taken by the Federal Open Market Committee earlier this month.

(Plosser is not a voting member of the FOMC in 2012.)

"I opposed the Committee's actions in September because I believe that increasing monetary policy accommodation is neither appropriate nor likely to be effective in the current environment," he said.

According to his speech, Plosser worries that should QE3 prove ineffective in improving the labor market the Fed will lose credibility with the public. "I do not think it prudent to risk that hard-won credibility," he said.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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