Posted on 08/12/2011 9:31:52 AM PDT by markomalley
Underscoring divisions at the central bank, one top policymaker on Friday said he had cut his forecast for economic growth, even as another said he saw no economic need for new monetary stimulus.
On Tuesday, the Federal Reserve reinforced its commitment to super-easy monetary policy by promising to keep benchmark interest rates near zero through mid-2013.
The central bank also said it was weighing other options to help strengthen a weak economic recovery. Three Fed officials cast their vote against the decision, the first triple dissent at the Fed since 1992.
In an unusual statement Friday defending his dissent, Minneapolis Fed Bank President Narayana Kocherlakota said that higher inflation and lower unemployment since the Fed had last eased policy meant that doing more was unnecessary.
"I do not believe that providing more accommodation -- easing monetary policy -- is the appropriate response to these changes in the economy," Kocherlakota said in the statement, posted on the Minneapolis Fed's website at: here
While unemployment is still "disturbingly high," he said, "the evolution of macroeconomic data did not reflect a need to make monetary policy more accommodative than in November 2010," when the Fed embarked on a $600 billion bond-buying program that ended this past June.
Inflation as measured by the Fed's preferred core PCE price index rose to 1.3 percent in the 12 months ended in June, from a low last December of 0.9 percent. Unemployment fell to 9.1 percent in July, down from just over 10 percent at its peak last year.
DUDLEY DEFENDS FOMC
However, speaking in New York at a media briefing, New York Fed President William Dudley, who on Tuesday cast his vote in favor of current easy monetary policy, emphasized the disappointing economic growth in the first half of 2011.
(Excerpt) Read more at reuters.com ...
What clash? We ARE Japan. Look at this economist’s charts on the economy and interest rates.
http://confoundedinterest.wordpress.com
The U.S. will try to recover unless the gov’t regulates us out of business.
Every time I read some new batch of twaddle out of some bunch of Fed members, or even one Fed member, I keep thinking about my idea to get something useful out of them.
We should create our own version of Kolyma in the US. There are good gold deposits in Alaska, for example. We need a place that is sufficiently hot in the summer and frigid in the winter. There’s gold in North Dakota as well.
Then round up all economists in the US, ship them off to our new government gold mine and work the economists until they prop up the US dollar with sufficient gold reserves, or they die of exhaustion and exposure.
Either way, it would be the first useful thing they’ve done in their miserable existence.
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