Tags: Federal | Reserve | Bernanke | divided

NY Times: Fed Panel Is Divided on Next Direction

By    |   Monday, 31 Oct 2011 02:26 PM

As the Federal Reserve prepares for the meeting of its policy-making committee (FOMC) this week, five of the committee’s 10 members have broken with Fed Chairman Ben Bernanke.

Three of the five think the Fed has gone too far in its easing, The New York Times reports. That’s Narayana Kocherlakota, president of the Minneapolis Federal Reserve Bank; Richard Fisher, president of the Dallas Fed; and Charles Plosser, president of the Philadelphia Fed.

The two doves think the Fed should be doing more to boost the economy. That’s Charles Evans, president of the Chicago Fed, and Janet Yellen, Fed vice chairman
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But unless the FOMC goes into open rebellion, Bernanke remains the one to call the shots. And he appears to be staying in a middle ground between the conservatives and liberals.

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Ben Bernanke
(Associated Press photo)
 
Bernanke says that while the Fed may face a need to ease further in the future, now it should trumpet what it’s already done to increase the impact of those moves on the economy.

The Fed “continues to explore ways to further increase transparency about its forecasts and policy plans,” Bernanke said in a recent speech.

Pimco bond fund manager Bill Gross warns that further easing as advocated by the doves would push bond yields higher.

“Future QE [quantitative easing] programs hinted at by Yellen and [New York Fed President William] Dudley are likely to push long-term yields higher, because their policy objective is 2 percent-plus inflation,” Gross writes in his monthly commentary.

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As the Federal Reserve prepares for the meeting of its policy-making committee (FOMC) this week, five of the committee s 10 members have broken with Fed Chairman Ben Bernanke. Three of the five think the Fed has gone too far in its easing, The New York Times reports. That...
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2011-26-31
Monday, 31 Oct 2011 02:26 PM
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