Christine
04-13-2012, 12:06 AM
By Brai Odion-Esene
WASHINGTON (MNI) – Monetary policymakers must not allow themselves
to be swayed by recent data indicating a possible slowing in the pace of
the jobs recovery, and instead should remain focused on the broader
picture, Philadelphia Federal Reserve Bank President Charles Plosser
said Thursday.
Taking questions from a speech to the National Economists Club in
Washington, Plosser said monetary policymakers cannot overreact to
initial estimates of data, noting that they are subject to revision.
Monetary policy focus must be “on the intermediate term, not the
short-term,” he said, adding that the Fed needs to be focused on the
underlying trend and not be moved so much by weekly or monthly swings in
economic numbers.
As for the chances of additional monetary stimulus from the Fed,
Plosser said current conditions in economy do not warrant QE3, saying
“it doesn’t seem to me that there’s a lot of coherence to the view” that
monetary policy should be looser.
He added that conditions now are markedly different compared to
when the Fed chose to implement a second round of quantitative easing in
late 2010, reiterating that an unemployment rate that is down and rising
inflation does not equate with the need for additional monetary easing.
Plosser also said he still objects to the late-2014 calendar date
in the FOMC statement, as “it is not a good way to conduct monetary
policy.”
He is not in favor of monetary policy triggers either, as it does
not address the path of policy before and after the triggers are
activated.
Pressed on if his public airing of disagreement with the FOMC
decision is bad for policy, all Plosser would say is that having such a
diversity of views is a strength of the system, and shows not just one
viewpoint matters.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]
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WASHINGTON (MNI) – Monetary policymakers must not allow themselves
to be swayed by recent data indicating a possible slowing in the pace of
the jobs recovery, and instead should remain focused on the broader
picture, Philadelphia Federal Reserve Bank President Charles Plosser
said Thursday.
Taking questions from a speech to the National Economists Club in
Washington, Plosser said monetary policymakers cannot overreact to
initial estimates of data, noting that they are subject to revision.
Monetary policy focus must be “on the intermediate term, not the
short-term,” he said, adding that the Fed needs to be focused on the
underlying trend and not be moved so much by weekly or monthly swings in
economic numbers.
As for the chances of additional monetary stimulus from the Fed,
Plosser said current conditions in economy do not warrant QE3, saying
“it doesn’t seem to me that there’s a lot of coherence to the view” that
monetary policy should be looser.
He added that conditions now are markedly different compared to
when the Fed chose to implement a second round of quantitative easing in
late 2010, reiterating that an unemployment rate that is down and rising
inflation does not equate with the need for additional monetary easing.
Plosser also said he still objects to the late-2014 calendar date
in the FOMC statement, as “it is not a good way to conduct monetary
policy.”
He is not in favor of monetary policy triggers either, as it does
not address the path of policy before and after the triggers are
activated.
Pressed on if his public airing of disagreement with the FOMC
decision is bad for policy, all Plosser would say is that having such a
diversity of views is a strength of the system, and shows not just one
viewpoint matters.
** MNI Washington Bureau: 202-371-2121 **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$]
http://feeds.feedburner.com/~ff/forexlive-rss?d=yIl2AUoC8zA (http://feeds.feedburner.com/~ff/forexlive-rss?a=fgrsd3r6OcM:TJ7SaYwTXrE:yIl2AUoC8zA) http://feeds.feedburner.com/~ff/forexlive-rss?i=fgrsd3r6OcM:TJ7SaYwTXrE:V_sGLiPBpWU (http://feeds.feedburner.com/~ff/forexlive-rss?a=fgrsd3r6OcM:TJ7SaYwTXrE:V_sGLiPBpWU) http://feeds.feedburner.com/~ff/forexlive-rss?d=qj6IDK7rITs (http://feeds.feedburner.com/~ff/forexlive-rss?a=fgrsd3r6OcM:TJ7SaYwTXrE:qj6IDK7rITs)
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