Fed Presidents Differ Over Central Bank Ability to Boost Growth

Two Federal Reserve policy makers differed over the central bank’s ability to boost growth, with one calling for more action to fight a “massive” shortfall in employment and the other saying further steps would probably serve only to stoke inflation.

“If we sit on our hands as the economy withers relative to our mandate, then we could take a huge hit to our credibility,” said Charles Evans, head of the Chicago Fed, invoking the damage to the central bank’s reputation during the Great Depression. The Richmond Fed’s Jeffrey Lacker said there’s little more the Fed can do because “the strength of this recovery is going to be relatively independent of our monetary policy choices.”