In wake of QE taper, Fed's Plosser dusts off inflation warning
PHILADELPHIA Jan 3 (Reuters) - The Federal Reserve faces "immense" challenges now that it has reduced bond-buying, and needs to be cognizant of a rapid rise in future inflation, a top U.S. central banker said on Friday.
Philadelphia Fed President Charles Plosser, a voter on monetary policy this year, said the central bank's balance sheet is still growing at "a fairly rapid clip" despite the $10-billion reduction in monthly asset purchases, which started this month.
Dusting off arguments he and other hawkish officials made before the recent bout of low inflation, Plosser said he was less concerned about disinflation and more concerned about too-high inflation if banks start to quickly release the $2.4 trillion in excess reserves they now hold.
- Police hunt for motive as search for Malaysian jet spans hemispheres |
- Crimeans vote over 90 percent to quit Ukraine for Russia |
- Ukraine, Russia agree Crimea truce until March 21-Ukraine minister
- Malaysian PM says lost airliner was diverted deliberately |
- Democrats seek ways to limit Obamacare fallout after Florida defeat