Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Plosser Says Fed Is Weighing Costs, Benefits of Easing

Jan. 15 (Bloomberg) -- Federal Reserve Bank of Philadelphia President Charles Plosser said the policy-setting Federal Open Market Committee is considering the costs and benefits of additional easing as it pursues its open-ended asset-purchase program.

We “made it very clear we will review that on a regular basis,” Plosser said in response to questions from reporters after a speech today in Rochester, New York. Policy makers are “weighing the costs versus the benefits of continuing to expand our balance sheet” and will “make the decisions on a continuous or ongoing basis.”

Fed officials are discussing how long they will continue purchasing mortgage bonds and Treasuries as part of efforts to fuel economic expansion and bring down a 7.8 percent unemployment rate. The Fed last month linked its interest-rate outlook to economic thresholds, saying borrowing costs will stay low “at least as long” as joblessness exceeds 6.5 percent and if inflation is projected to be no more than 2.5 percent one or two years in the future.

“I’m not anxious to tighten right now but I do believe we need to sit back and weigh” possibly stopping additional stimulus, Plosser said. He said he’s “not terribly comfortable with” the latest bond buying and “not sure” what impact it’s having on achieving the Fed’s dual mandate of full employment.

U.S. Treasuries rose for a third straight day, pushing yields to near their lowest of the year, amid concern about raising the debt ceiling. Yields on 10-year notes declined two basis points to 1.82 percent as of 2:25 p.m. in New York. The Standard & Poor’s 500 Index fell less than 0.1 percent to 1,470.56 after slipping as much as 0.5 percent earlier.

Plosser, who doesn’t vote on monetary policy this year, also said in his speech that he sees medium-to-longer-term inflation risks “given the current stance and anticipated path of monetary policy.” The speech was similar to remarks given in Somerset, New Jersey, on Jan. 11.

To contact the reporter on this story: Caroline Salas Gage in New York at csalas1@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.