September 29, 2011 / 3:00 PM / 8 years ago

Fed's Plosser-Reinvesting in MBS complicates exit

RADNOR, Pa, Sept 29 (Reuters) - A top Federal Reserve official said Thursday the U.S. central bank erred when it decided to reinvest proceeds in mortgage-backed securities, saying it will complicate efforts to exit its loose monetary policy.

Philadelphia Federal Reserve President Charles Plosser, speaking to reporters, also said that cutting interest rates on excess bank reserves held at the Fed would only have a marginal impact and should be weighed against the costs.

Reporting by Kristina Cooke; Editing by Chizu Nomiyama

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