By Brai Odion-Esene
ROCHESTER, NY (MNI) – James Glassman, senior economist at JP Morgan
Chase, argued Thursday that the Federal Reserve’s program to purchase up
$600 billion of long-term U.S. government debt should not be regarded as
quantitative easing.
In a presentation at the 32nd Annual Economic Seminar sponsored by
the Simon Graduate School of Business and JP Morgan in Rochester,
Glassman agreed with comments by Philadelphia Fed President Charles
Plosser, who had spoken earlier.
“I think there’s a lot of confusion about this,” Glassman said,
taking issue with the image — rampant in the media — of the Fed
printing large amounts of money which is then finding its way into
emerging markets.
“I think there is a real misunderstanding in what it is that the
Fed is doing,” he said.
While it appeared at the beginning that the central bank is engaged
in another round of quantitative easing, Glassman said he agreed with
Plosser’s view that what the Fed is doing, the U.S. Treasury could do as
well.
In his prepared remarks, Plosser had argued that, in principle, the
U.S. Treasury could achieve the same portfolio balance effect as the Fed
seeks with its large scale asset purchases — without the Fed’s
involvement — “if it chose to issue fewer long-term bonds and more
short-term securities.”
“The quantitative easing label is probably not the right label,”
Glassman said, “which is adding to confusion.”
** Market News International **
[TOPICS: M$U$$$,MMUFE$,MGU$$$,MFU$$$,MK$$$$]
