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The More Things Change, The More They Stay The Same (At The Fed), Says Guy

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Ben Bernanke is at the Brookings Institution and Janet Yellen is in charge at the Fed. And, if Richmond Fed President Jeffrey Lacker is to be believed, it doesn't matter at all.

The central bank’s Federal Open Market Committee agreed last week to pare back its bond-buying by $10 billion, after an initial $10 billion cut announced in December. “I supported both decisions because they are consistent with the linkage the Committee established between the asset purchase program and the outlook for labor market conditions,” Mr. Lacker said in the text of a speech as prepared for delivery at Shenandoah University in Winchester, Va….

Mr. Lacker has been skeptical of the Fed’s bond-buying program, which aims to stimulate the economy by lowering borrowing costs. He doesn’t have a vote this year on the policymaking open-market committee but said on Tuesday that he expects “to see further reductions in the pace of purchases at upcoming meetings.”

He said the U.S. economy will continue to grow in 2014, predicting growth in gross domestic product of a little above 2% this year. He’s less optimistic than many of his colleagues: Fed officials generally expect real GDP to grow 2.8% to 3.2% in 2014, according to projections released in December.

Fed's Lacker Sees Continued Reduction in Bond Purchases [WSJ Real Time Economics blog]


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