Friday, Oct 31, 2014Friday, Oct 31, 2014
News
 

Fed hawks, wielding votes, urge faster end to bond buying

Published on Jan 15, 2014 6:41 AM
 
Mr Richard Fisher, president and chief executive of the Federal Reserve Bank of Dallas, gestures as he speaks during a conference before the Committee for the Republic Salon at the National Press Club in Washington in this file photo from Jan 16, 2013. 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 Mr Fisher vowing to use his vote to support cuts to the programme even if stocks, now near record highs, take a tumble. -- FILE PHOTO: REUTERS

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.

 
If you are not a subscriber, you can get instant, unlimited access here