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Tags: federal reserve | esther george | bond buying | jobs

Fed's George Pushes Hard to End Bond-Buying Program Now

Tuesday, 16 July 2013 12:25 PM

The U.S. Federal Reserve should start cutting its massive bond-buying program right away, the hawkish president of the Kansas City Federal Reserve Bank said on Tuesday, citing improvement in the jobs market since the buying began.

"I think it is time to begin to adjust those purchases," Esther George told Fox Business Network, in her first public interview since taking the helm at the regional bank in October 2011.

She acknowledged that her call for a quick end to the bond-buying program puts her outside of the policy-setting core at the Fed.

Editor's Note: The Final Turning Predicted for America. See Proof.

"I'm open to engaging with my colleagues about the right pace, but I think sooner is appropriate, to begin now, because we have a long way to go if we are going to do this in a gradual and systematic way."

The Fed has been buying $85 billion in Treasuries and housing-backed securities since last September to push down long-term borrowing costs and boost investment and hiring.

When it began the program the jobless rate was about 8.1 percent. The most recent reading, for June, was 7.6 percent.

George has dissented at every meeting of the Fed's policy-setting panel this year, saying she is concerned about continued aggressive monetary policy easing when the economy is growing, and is concerned it could fuel imbalances.

She reiterated that concern on Tuesday, saying the Fed's current program "has raised questions for me about its costs relative to its benefits."

Fed Chairman Ben Bernanke said last month that the Fed could start to reduce bond-buying later this year, ending it by mid-2014 when the unemployment rate will likely be around 7 percent.

"I've been a proponent of doing it faster and sooner, but I think the important thing is to start the process," George said, adding that the 7 percent unemployment rate target could change as more people come back into the labor force.

"I think if you are going to move in a gradual way you may find yourself into 2014 beginning to adjust those purchases," she said. "My preference has been just to take a more systematic approach to beginning to adjust those purchases down."

Minutes from the most recent policy-setting meeting, in June, show that about half of the Fed's 19 policymakers support and end to the bond-buying program by the end of this year.

But George suggested that sentiment may not carry the day at the Fed, where all voters but herself supported continued monetary policy easing in June.

"The important signal is the one the committee sends in its official stance of policy," George said.

Editor's Note: The Final Turning Predicted for America. See Proof.

© 2022 Thomson/Reuters. All rights reserved.


StreetTalk
The U.S. Federal Reserve should start cutting its massive bond-buying program right away, the hawkish president of the Kansas City Federal Reserve Bank said on Tuesday, citing improvement in the jobs market since the buying began.
federal reserve,esther george,bond buying,jobs
448
2013-25-16
Tuesday, 16 July 2013 12:25 PM
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