Larry Meyer: "QE Not the Next Thing to Happen"

Larry Meyer, former member of the Federal Open Market Committee and founder of Macroeconomic Advisers, was just on CNBC talking about what he thinks might happen at the Federal Reserve meeting later today. When the Fed comes out with its next decision at 12:15 p.m. today, Meyer said that he wants to see if the FOMC will mention downside risks to its forecast, but that it might not get more into it then that. He mentioned the likelihood of more quantitative easing in the next twelve months, but that it is "not the next thing to happen." It is in reserve if the FOMC thinks the economy is likely to deteriorate. When asked what he would ask Chairman Ben Bernanke at the press conference today, Meyer said that he wants to know if the committee is moving closer to a explicit inflation objective, and if the FOMC is more tolerant to accept inflation over runs. He said a decision on that front has likely not been made, but Meyer wants to know about it. The last subject discussed was something that is very hot in economics right now, nominal GDP targeting, or NGDP. It has been recommended by a lot of smart and respected economists. Meyer said that Bernanke is looking to become more transparent, but that this is in fact a less transparent regime. It is implicit that with the Fed keeping rates low for an extended period of time that inflation will rise without saying it. It has a a medium term inflation objective, but it needs to be more explicit on that. Meyer concluded by saying the FOMC needs to move towards best practice central banking, and it is not there.