Former central bank governor Frederic Mishkin said the Federal Reserve is undergoing what he is calling an unprecedented level of attacks caused by its inability to articulate a clear message regarding its multitrillion-dollar monetary policies.
Mishkin told CNBC that the Fed has done a poor job justifying its efforts to buy Treasurys and other securities to revive the economy.
"Monetary policy is never easy. You're always the whipping boy. The question is the degree," he told CNBC. "Now you're getting whipped with a little bit harder lash than usual. But you've got to make the tough calls and you've got to provide leadership. This is what you do with central banks."
Mishkin is an economist and professor at Columbia Business School and served on the Fed from 2006-08.
"The credibility of the Fed has been hurt not only by the issue of not putting this in a long-run context, but secondly by the tremendous dissension from the committee, which again is unprecedented," he said.
"I'm a little surprised there hasn't been more done internally to rein this in."
St. Louis Fed President James Bullard has also said the Fed might have done a better job explaining how its policies differ from federal rescues of financial institutions.
Federal Reserve Chairman Ben Bernanke defended his expansion of record monetary stimulus last week in a meeting with Senators as top Republican lawmakers stepped up their criticism of the central bank chief’s policies.
Bernanke said the Fed’s plan to buy $600 billion in assets would spur job growth while keeping inflation under control. John Boehner, the presumptive House speaker, and three other Republicans sent Bernanke a letter expressing “deep concerns” about a policy they said risked weakening the dollar and fueling asset bubbles.
Bernanke spent months preparing financial markets for the second round of stimulus, which was announced Nov. 3, the day after elections that gave Republicans control of the House of Representatives on a wave of anti-government sentiment.
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