Federal Reserve Bank of Richmond President Jeffrey Lacker said he favors slowing bond buying now to ensure record growth in the central bank’s balance sheet doesn’t impede the eventual withdrawal of record accommodation.
“I’m in the camp we have to taper and stop right now if it were up to me,” Lacker told CNBC. "If you made me dictator, that's what I would do. I wouldn't have gone down this asset purchase path,” he said.
The Fed is buying $85 billion of Treasurys and mortgage-backed securities each month.
“The deeper we go with asset purchases, the trickier we are going to make the exit process,” he said. “That to me is the largest cost.”
He also said that expectations for future U.S. inflation remained well-anchored, despite massive Fed policy easing that he had personally opposed.
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"I have been impressed by the stability of inflation expectations. People are pretty confident we're not going to let it get away from 2 percent. I like that," Lacker said. "I think we're in a good place now, but I think we shouldn't be complacent," he said.
Lacker said he expects the overall economy to grow at about a 2 percent rate this year and for the unemployment level to be "below seven [percent] at the end of next year." The rate is currently 7.6 percent.But earlier this week, other Fed officials stressed the need to continue easing.
The slowest payrolls growth in nine months in March “underscores the need to wait and see how the economy develops before declaring victory,” William C. Dudley, president of the Federal Reserve Bank of New York, said in a speech in Staten Island, Bloomberg News reported.
“I don’t think we should be complacent,” Charles Evans, president of the Chicago Fed, said separately. “Unemployment is unacceptably high.”
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