In a Reuters interview, Philly Fed president Charles Plosser says the Fed should not ease more in an attempt to solve the unemployment problem. If real deflation risks arose, he would entertain the idea. Plosser sees no double-dip, just a soft patch in the recovery. He sees growth of 3% this year and 3.5% next year.
Plosser says there is nothing the Fed can do to affect the unemployment rate through year end and downplays the utility of reinvesting the proceeds of its MBS portfolio. He sees the move having no measurable impact…
Markets are taking the comments in stride with the S&P still up 2.7%.
