Fed Officials Reject Warning Losses May Weaken FOMC Clout

Two Federal Reserve policy makers rejected a warning from economists that potential losses on the Fed’s $3.1 trillion balance sheet may undermine central bank control of monetary policy.

Boston Fed President Eric Rosengren said today “this discussion does not do justice to the policy trade-offs” of the Fed’s large-scale asset purchases, referring to a paper written by four economists, including Frederic Mishkin, a former Fed governor and co-author with Chairman Ben S. Bernanke. Fed Governor Jerome Powell dismissed a suggestion policy makers won’t act to curb inflation.