Jeffrey M. Lacker, who is President of the Federal Reserve Bank of Richmond, has warned repeatedly that the Fed’s extraordinary efforts to stimulate growth are ineffective and inappropriate. Last year, he cast the sole dissenting vote at each of the eight meetings of the Fed’s policy-making committee, which is only the third time in history a Fed official dissented so regularly.
He states, “We’re at the limits of our understanding of how monetary policy affects the economy. The economy continues to muddle along, shadowed by the threat of another government breakdown, and the crisis of high unemployment is only slowly receding. But in trying to address those problems by suppressing interest rates, the Fed risks the unleashing of speculation and inflation." At least, someone at the Fed has some sanity to the ultimate consequences of increasing the Fed's balance sheet in excess of $2 trillion through its QE programs.
He states, “We’re at the limits of our understanding of how monetary policy affects the economy. The economy continues to muddle along, shadowed by the threat of another government breakdown, and the crisis of high unemployment is only slowly receding. But in trying to address those problems by suppressing interest rates, the Fed risks the unleashing of speculation and inflation." At least, someone at the Fed has some sanity to the ultimate consequences of increasing the Fed's balance sheet in excess of $2 trillion through its QE programs.
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