(Reuters) - All 52 economists surveyed by Reuters expect the Federal Reserve Bank to embark on a new round of Treasury purchases in a bid to support a sluggish economy, boost undesirably low inflation and reduce a stubbornly high jobless rate.
Fed officials are not nearly as united, with hawks, whose overriding concern is the threat of inflation, spelling out the costs of such an approach, and doves, who worry most about unemployment, touting the potential benefits.
The following are some recent comments from Fed policymakers (* denotes 2010 voting member of the Federal Open Market Committee, which sets U.S. monetary policy):
MINNEAPOLIS FED PRESIDENT NARAYANA KOCHERLAKOTA, October 14
“My own guess is that further uses of QE would have a more muted effect on Treasury term premia” than the first round in early 2009, because markets are functioning much better now.
* BOSTON FED PRESIDENT ERIC ROSENGREN, October 14
Japan “also did quantitative easing, but they did it very gradually,” Rosengren told CNBC television. “What this highlights is we may not want to do it nearly as gradually.”
“It’s a low-probability event that we have deflation, but we don’t even want disinflation.”
RICHMOND FED PRESIDENT JEFFREY LACKER, October 13
“I said several weeks ago that I thought if the economic growth and inflation numbers came in the way I was expecting them to, I’d probably not support more easing ... I’m kind of in the same place.”
MINUTES OF SEPT. 21 FOMC MEETING, released October 12
“Members generally thought that the statement should note that the committee was prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.
“Such an indication accorded with the members’ sense that such accommodation may be appropriate before long, but also made clear that any decisions would depend upon future information about the economic situation and outlook.”
* KANSAS CITY FED PRESIDENT THOMAS HOENIG, October 12
“We have to recognize that QE2, while a possibility, is not necessarily what we want to do given the benefits versus the risks.
“Given the likely size of actions and the time horizon over which QE2 would be in place, inflation expectations might very well increase beyond targeted levels, soon followed by a rise in long-term Treasury rates, thereby negating one of the textbook benefits of the policy.”
* FED VICE CHAIR JANET YELLEN, October 11
“It is conceivable that accommodative monetary policy could provide tinder for a buildup of leverage and excessive risk-taking in the financial system.”
* NEW YORK FED PRESIDENT WILLIAM DUDLEY, October 10
“I would expect that as time passes, we will see further improvement in credit availability, and as that happens that will help support economic activity going forward.”
* ST. LOUIS FED PRESIDENT JAMES BULLARD, October 8
“This upcoming FOMC meeting is going to be a tough call, because the economy has slowed but it hasn’t slowed so much that it’s an obvious case to do something,” Bullard told CNBC.
“I do think the risk of a double-dip recession has probably receded some in the last six to eight weeks.”
* KANSAS CITY FED PRESIDENT THOMAS HOENIG, October 7
“There is discussion in the media, and broadly speaking, even amongst Federal Reserve policy members that we need to increase our stimulus for monetary policy. Now, I happen to disagree with that.”
DALLAS FED PRESIDENT RICHARD FISHER, October 7
“I instinctively understand the impulse to put the monetary pedal to the metal to try to move the needle on employment growth.
“And yet the efficacy of further accommodation at this point has yet to be established.”
CHICAGO FED PRESIDENT CHARLES EVANS, October 5
“In the last several months I’ve stared at our unemployment forecast and come to the conclusion that it’s just not coming down nearly as quickly as it should,” Evans told The Wall Street Journal.
“This is a far grimmer forecast than we ought to have,” he said, for which reason he favors “much more accommodation than we’ve put in place.”
* FED CHAIRMAN BEN BERNANKE, October 4
“I don’t have a number to give you, but I do think that the additional purchases, although we don’t have precise numbers, have the ability to ease financial conditions.”
PHILADELPHIA FED PRESIDENT CHARLES PLOSSER, October 4
“I think that before we engage (in further quantitative easing) we need to be very clear about what it is we’re trying to do, how we’re going to go about doing it, how we’re going to measure whether we’re effective at it or not, and how we’re going to communicate that,” he told the Financial Times.
DALLAS FED PRESIDENT RICHARD FISHER, October 1
“Barring an unforeseen shock, I have concerns about the efficacy of further expanding the Fed’s balance sheet until our political authorities better align fiscal and regulatory initiatives with the needs of job creators.”
CHICAGO FED PRESIDENT CHARLES EVANS, October 1
“The size of the unemployment gap, combined with the fact that inflation has been running below the level I consider consistent with long-term price stability, suggests that it would be desirable to increase monetary policy accommodation to boost aggregate demand and achieve our dual mandate.”
* NEW YORK FED PRESIDENT WILLIAM DUDLEY, October 1
“Further action is likely to be warranted unless the economic outlook evolves in such a way that makes me more confident that we will see better outcomes for both employment and inflation before too long.”
Our Standards: The Thomson Reuters Trust Principles.