Tags: monetary | policy | fed | hoenig | federal | reserve | central

Hoenig: Fed Shouldn't Try to Fine-Tune Economy

Sunday, 31 Oct 2010 05:16 PM

Kansas City Federal Reserve Bank President Thomas Hoenig said monetary policy isn’t suitable for fine-tuning the economy, according to an interview with Neue Zuercher Zeitung.

Policy makers should take a step back and ask themselves what their role is, he was quoted as saying. “We should pursue a long-term strategy given the long and varied impact that monetary policy has on the economy,” Hoenig told the Zurich-based newspaper in the interview.

If one in convinced that monetary policy can eradicate all evil, one will cause instability, he said.

A further easing of monetary conditions would mean that “the Fed risked higher inflation for a very small additional advantage in the form of somewhat lower long-term interest rates. I’m not willing to take this risk,” he told the newspaper.

Saying one could lower the unemployment rate by increasing inflation, is “very dangerous,” he told the newspaper.

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Kansas City Federal Reserve Bank President Thomas Hoenig said monetary policy isn t suitable for fine-tuning the economy, according to an interview with Neue Zuercher Zeitung.Policy makers should take a step back and ask themselves what their role is, he was quoted as...
monetary,policy,fed,hoenig,federal,reserve,central,bank,interest,rates,economy
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2010-16-31
Sunday, 31 Oct 2010 05:16 PM
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