The Fed’s Fisher disagrees with Bernanke

The FOMC decision to buy more Treasuries has elicited responses unlike the Fed has ever seen I believe, from not only in defense of it by Bernanke himself but from overseas officials who don’t like it. Non voting member Fisher is chiming in today in a speech and he doesn’t like it either. “Liquidity and abundant money are not the binding constraints on the economic activity we wish to see…The remedy for what ails the economy is, in my view, in the hands of the fiscal and regulatory authorities, not the Fed. I could not state with conviction that purchasing another several hundred billion $’s of Treasuries would lead to job creation and final demand spurring behavior. But I could envision such action would lead to a declining $, encourage further speculation, provoke commodity hoarding, accelerate the transfer of wealth from the deliberate saver and the unfortunate, and possibly place at risk the stature and independence of the Fed.”

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