LONDON (MNI) – Philadelphia Federal Reserve President Charles
Plosser said he had come to the conclusion that the costs of the Fed’s
QE3 policy could be very much higher than any benefits.
Reprising his recent criticism of Fed policy, Plosser told
Bloomberg television in an interview that he had “come to conclusion
that the risks and the costs might be very much higher than whatever
small benefits we might get”.
Plosser said that the credibility of the Fed could be hurt if the
policy didn’t work but dismissed ideas that his own critique of QE3 was
damaging the Fed’s reputation.
The official refused to answer questions on how much the latest
round of Fed QE could expand the bank’s balance sheet by.
“I have no idea – it depends on what happens with the economy,”
Plosser added.
–London Bureau; tel: +442078627492; email: dthomas@marketnews.com
[TOPICS: MMUFE$]