Fed Lacker Dissents on Effects of QE3
The Federal Reserve's latest stimulus will not boost economic growth without creating unwanted inflation, said Jeffrey Lacker, president of the Richmond Fed and lone dissenter on the central bank's policy committee.
Lacker said Friday he also opposes the Fed's indication that it expects to keep interest rates near zero until at least mid-2015, and the suggestion that rates will be kept low even as economic growth picks up.
“Improvement in labor market conditions appears to have been held back by real impediments that are beyond the capacity of monetary policy to offset,” Lacker said in a statement. “In such circumstances, further monetary stimulus runs the risk of raising inflation in a way that threatens the stability of inflation expectations.”
Three years into an anemic recovery from the deepest recession in generations, the economy expanded at an annualized rate of just 1.3 percent in the second quarter, and growth is expected to remain below 2 percent in third-quarter figures to be released on Friday.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.