Fed hawks, wielding votes, urge faster end to bond buying
DALLAS/PHILADELPHIA (REUTERS) - The Federal Reserve should bring its bond-buying programme to a swift close, according to two of its most hawkish policymakers who take up voting power this year, with Dallas Fed chief Richard Fisher vowing to use his vote to support cuts to the programme even if stocks, now near record highs, take a tumble.
The comments on Tuesday from Mr Fisher and Mr Charles Plosser, president of the Philadelphia Fed, come roughly two weeks before the United States (US) central bank's first policy meeting of the year. They suggest that incoming chair Janet Yellen will face internal pressure to ramp up withdrawal of the extraordinary stimulus, which policymakers last month decided to trim to US$75 billion (S$95 billion) a month from US$85 billion.
The Fed's third round of quantitative easing, the purchase of US Treasuries and mortgage-backed securities known as QE3, is aimed at pushing down long-term borrowing costs in order to boost hiring and growth.
Outgoing Fed chair Ben Bernanke, whose term expires just two days after January's policy meeting, said in December that the Fed would continue to pare purchases and end them later this year, as long as the economy continues to improved as expected.