Fed’s Lockhart Warns on Risks of Excessive Easing
The latest member of the Federal Reserve to speak publicly was Atlanta Fed President Dennis Lockhart, who stated in a speech on Tuesday that “There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reform.”
“There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms that involve making tough choices about the allocation of public resources,” he added. “Monetary policy can exert a powerful positive influence on an economy, but as Chairman Bernanke has pointed out, monetary policy is not a panacea.”
However, Lockhart did not specifically discuss the potential for a third round of quantitative easing (QE3) in his speech.
His comments were noticeably different from ones made last month, when he asserted that disappointing economic data had raised the odds for further monetary easing by the Fed.
Following today’s speech, Lockhart told reporters that recent economic reports had been “a little firmer.”
As for the strong performance of financial markets this summer, Lockhart stated that “Anytime you see the equity markets rise, I think what it tells you is there is more appetite for risk. And in the current context, I would interpret that to be some comment on more confidence that Europe will work through its problems without a major incident of some kind.”
2012-08-21 12:02:58
Source: http://www.goldalert.com/2012/08/feds-lockhart-warns-on-risks-of-excessive-easing/
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