Last fall, Philadelphia Fed president Charles I. Plosser dissented from the FOMC’s decision to launch the asset repurchasing program known as Operation Twist.Today, Plosser outlined his continuing objections to further easing in a speech in Delaware.
“In my view, current conditions do not warrant further accommodation,” he said.
“Now that unemployment is at 8.3 per cent and falling and inflation is over 2 per cent and drifting up, we should not anticipate additional accommodation.”
Conditions have so improved that rates may even need to be raised before the end of 2014, the target end date for the Fed’s zero interest rate policy, Plosser added, barring new shocks.
Whether or not that occurs, crisis-level policies are no longer warranted, he said.
“I believe monetary accommodation is still called for, but I do not believe it should be as accommodative or aggressive as it was at the height of the crisis, when unemployment was over 10 per cent and inflation was just 1 per cent.”
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