Fed's Plosser cautions against policy easing: report
SINGAPORE | Mon Oct 4, 2010 3:34am EDT
SINGAPORE (Reuters) - The Federal Reserve must not launch a new round of asset purchases without setting out what it wants to achieve through the policy, the Financial Times quoted Philadelphia Fed President Charles Plosser as saying.
His comments contrast with those of New York Fed chief William Dudley and Chicago Fed President Charles Evans, who in the clearest calls yet said on Friday that more easing was needed unless the economic outlook improves.
Expectations that the Fed might ease policy as soon as its next meeting on November 2-3 have put downward pressure on the dollar and supported U.S. Treasuries.
But Plosser reiterated his concerns over further easing.
"I think that before we engage (in further quantitative easing) we need to be very clear about what it is we're trying to do, how we're going to go about doing it, how we're going to measure whether we're effective at it or not, and how we're going to communicate that," he told the FT in an interview published on Monday.
The FT did not say when the interview was conducted.
Plosser has been outspoken in expressing concern about the massive expansion of the Fed's balance sheet, which has doubled from pre-crisis levels as a result of recession-fighting efforts.
(Reporting by Kazunori Takada; Editing by Neil Fullick)
