Federal Reserve Bank of Atlanta President Dennis Lockhart rebutted critics of the central bank who say its policies are monetizing the national debt or encouraging more deficit spending.
“I object to the view that the Fed is monetizing the debt,” Lockhart said as part of a panel discussion at the University of Iowa in Iowa City.
Fed officials led by Chairman Ben S. Bernanke have said repeatedly they would not try to monetize debts by increasing money and stimulating inflation. Bernanke has urged Congress and President Barack Obama to put fiscal policy on a sustainable path.
The “coincidence” of accommodative monetary policy and increases in the government’s debt “doesn’t mean they are connected,” Lockhart said at a University of Iowa School of Law conference on the national debt.
Fed policy makers have “pursued very accommodative monetary policy,” Lockhart said, and “I have been supportive of accommodative policies and I continue to do so.”