The doves and the hawks on the FOMC continue to debate the relative merits or demerits to QE on the newswires. Philly’s Plosser is back on the wires saying the more you blow up the Fed’s balance sheet the harder it is to unwind.
Monetary policy is unlikely to to bring down unemployment, Plosser says, IF growth recovers ( BIG if) and confidence resumes, the Fed will have to hike rates, Plosser says.
Plosser says if the Fed committed to purchase assets in the basis of deflation fighting, Plosser says he would be on board. Sounds like he would not be on board if it were just the last thing on the list to try and spur a recovery…
Rosengren parries back that disinflation is to be avoided as it acts as an implicit tightening.
