Fed Officials Signal Broad Support For Doing More
WASHINGTON (AP) â¿¿ Several Federal Reserve officials made clear this week that Chairman Ben Bernanke commands broad support for the Fed's plan to continue stimulating the economy if hiring doesn't pick up.
As Vice Chairman William Dudley put it in a speech: "If you're trying to get a car moving that is stuck in the mud, you don't stop pushing the moment the wheels start turning â¿¿ you keep pushing until the car is rolling and clearly free."
Last week, the Fed said it would spend $40 billion a month to buy mortgage bonds to try to make home buying more affordable. It left open the possibility of taking other steps. And it signaled that the economy would receive help from the Fed even after the recovery strengthens.On Friday, Dennis Lockhart, president of the Atlanta Federal Reserve Bank, stressed that the new round of bond purchases would continue until the job market improves, and "if we do not see improvement, more action may be taken." In a speech Thursday, Eric Rosengren, president of the Boston Federal Reserve Bank, said he was pleased that the Fed's policy committee was "willing to take difficult actions like these rather than accept the possibility of a long, slow recovery turning into a stagnation that someday earns the dubious title of 'Great.' " Dudley and Rosengren have been leading voices among the officials who favor aggressive intervention to combat chronic high unemployment. A smaller group of Fed officials have expressed concern that continued stimulative action by the Fed is elevating the risk of high inflation later. Jeffrey Lacker, president of the Richmond Fed, has been a leader of this group, often described as inflation "hawks." Lacker was the lone dissenter in the Fed's 11-1 vote to launch a bold new stimulative program. He has cast the only dissenting vote at all six Fed meetings this year. Besides expressing concern about inflation, Lacker has argued that the Fed's moves would likely do little to boost growth.
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