Federal Reserve Bank of Philadelphia President Charles Plosser and Dallas Fed President Richard Fisher may dissent from Fed Chairman Ben S. Bernanke’s plan to purchase $600 billion in Treasurys, former Fed governor Lyle Gramley said.
“I think Charles Plosser of Philadelphia and Richard Fisher of Dallas probably will dissent from time to time,” Gramley said today in an interview on Bloomberg Television’s “Fast Forward” with Peter Cook. “It probably isn’t going to affect the outcome of monetary policy decisions. Ben Bernanke still has control of the committee.”
Plosser said in an interview last week it was a “close call” on whether he would have dissented from the Fed’s Dec. 14 reaffirmation of plans to buy $600 billion in Treasurys through June, expanding record stimulus to try to reduce 9.8 percent unemployment and keep inflation from dropping. Fisher said in November that the move may be “the wrong medicine” for the U.S. economy.
As part of an annual rotation in voting on Fed policy, Plosser, Fisher and the heads of the Chicago and Minneapolis Fed banks will cast votes in 2011. The leader of the New York Fed has a permanent vote.
“This is a year in which the Fed probably won’t have to do a thing, just sit still, let the economy take care of itself,” said Gramley, senior adviser at Potomac Research Group in Washington. “We’re looking at an economy that is improving, so the Fed isn’t going to have to add more stimulus.”
This month, Kansas City Fed President Thomas Hoenig, the longest-serving policy maker, voted against Fed policy for the eighth straight time, reiterating his view that the “continued high level of monetary accommodation” may eventually “destabilize the economy.” He tied former Governor Henry Wallich’s record in 1980 for most dissents in one year.
© Copyright 2022 Bloomberg News. All rights reserved.