admin“President Bullard . . . felt that the committee’s decision to authorise the chairman to lay out a more elaborate plan for reducing the pace of asset purchases was inappropriately timed,” the St Louis Fed’s statement said.
Bullard was one of two dissents cast on Wednesday by members of the US central bank’s policy-setting Federal Open Market Committee. The other dissent, by Kansas City Fed president Esther George, was in the opposite direction, as she worried that ongoing bond buying could stoke financial instability.
Global financial markets have sunk sharply since Fed chairman Ben Bernanke laid out the plan to begin cutting the pace of asset purchases later this year, provided the US economy continues to improve as the central bank expects. The Fed is currently buying bonds at an US$85 billion monthly pace to put downward pressure on longer term borrowing costs.
These steps, together with official Fed overnight interest rates that have been held near zero since late 2008. – Reuters.
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