Following non voting Plosser’s comments saying he would not buy more Treasuries right now, voting member Rosengren, very much on the Bernanke dove side of the Fed, seems to want to in a speech titled “How Should Monetary Policy Respond to a Slow Recovery.” His view is that “it is important that policymakers be open to implementing policies consistent with achieving full employment, and an appropriate level of inflation, within a reasonable time frame.” To those that say it would be tough to reduce Treasury rates further, he says that “US Treasury rates are still well above the zero bound, roughly equivalent to rates in Germany, and well above long term rates in Japan.” He then goes on to say however that the Fed has “no desire or intention whatsoever” to monetize the federal debt. Whether intentional or not, that’s exactly what they are doing.
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