Fed Presidents Fight Over Central Bank Policy

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July 15 (Bloomberg) -- Bloomberg Economics Editor Michael McKee recaps his interviews with Philadelphia Fed President Charles Plosser and St. Louis Fed President James Bullard on central bank policy from the Rocky Mountain Economic Summit in Jackson, Wyoming. He speaks on Bloomberg Television's "Bloomberg Surveillance."

Plosser and bullard, representing to different wings of the fed, plosser says, taper immediately, and bullard says, maybe we should wait to see how inflation develops.

Gdp is pretty slow.

The interesting question is when if you are going to do it, when do you start to do it?

There is a fed meeting at the end of july, but everybody's talking about september.

I have a communications problem, as charlie plosser told me.

I said, if you are so hot to do it, i are you saying september incident july?

That is an interesting question.

I think it is sometimes a bit unfortunate that the press conference schedule is now occurring on quarterly meetings.

Some people think we can only make decisions when we have a press conference.

I do not think that is the right way to think about what we do or how we should think about it.

I hope we do not get into that pattern and set the expectation so we can only make decisions at press conferences.

Jim bullard feels the same way, the whole press conference issue is a real problem for them.

Was there any discussion of the fed, plosser's impact, bullard's impact, for 90s impact on the markets?

We are at record highs.

Is this a bernanke equity market?

Is a fed equity market, but the problem is the volatility that has come into the market.

That is a real issue for somebody like jim bullard who says, it is our fault.

He had that statement right after the fed meeting where he came out -- i asked him, why are you so concerned about how the fed is saying this?

I thought there was a little bit of slippage back to database forward guidance.

We worked hard to get rid of that he does we think it wasn't that successful.

-- because we did not think it was that successful.

To have it creep back in was something i found disturbing.

Chairman did a good job, however, of emphasizing state dependence and it would depend on the economy.

I think he didn't mitigate that to some extent, but still there is a date that was put out.

In the mid to, he was talking about the speech that the fed chairman gave last week up in boston.

Jim bullard was sitting in the front row and ben bernanke had to acknowledge, my good friend jim bullard and his concerns.

It raises the question of what the chairman is thinking and what he is doing and what his position is amidst all this babble from the other presidents as we look towards wednesday.

What is german bernanke's position -- chairman bernanke's position in regard to tapering?

We believe he is in favor of it given what he has said, starting sometime in the near future, and i asked both of these gentlemen whether they thought there would be some sort of announcement at humphrey hawkins.

They said, no.

He will spend more time is passing what they have done.

We've got howard devitt of its here helping with retail america.

Retail america feels pretty good.

Our retirement plans look better.

Again, i go back to this single institution that controls the spirit of retail, controls the spirit of the equity markets, which is the fed.

Has never been like this before.

It hasn't been like this in a very long time.

On the negative side, you can go back to when paul volcker was raising interest rates.

It has been a long time since we have this kind of impact.

They are very sensitive to that.

The question is, is the economy on solid enough putting for the fed to get out of the market?

Jim bullard made a good point about that.

We will have much more throughout the morning.

We will talk about this at one point.

This text has been automatically generated. It may not be 100% accurate.

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