Washington (AP) - A Federal Reserve official said Tuesday he would oppose going beyond the Fed's $600 billion bond-buying program to boost the economy and would push to scale it back if inflation posed a threat.
Richard Fisher, president of the Federal Reserve Bank of
Fisher made the remarks hours after Jeffrey Lacker, president of the Federal Reserve Bank of
The growing criticism suggests Fed Chairman Bernanke will face a difficult time if he chooses to launch a new bond-buying program when the current one ends in June.
"It is hard for me to envision a scenario where I would not use my voting position this year to formally dissent" should the Fed recommend embarking on another bond-buying program, Fisher said in a speech in
Both men have reputations for being inflation hawks. They are more focused on the threat of inflation than on efforts to stimulate growth.
Fisher worries that the billions of dollars pumped into the economy through the program could unleash inflation.
And, if higher prices for commodities, such as oil, were to lead to a broader inflation problem in the economy, Fisher said he would "be at the forefront of the effort to trim back our Treasury holdings" and scale back the current $600 billion program.
Lacker said more spending by consumers and businesses means the economy probably will grow at a faster pace of around 4 percent this year, compared with 2.9 percent last year.
Inflation should stay in check, he said in a speech in
"The distinct improvement in the economic outlook since the program was initiated suggests taking that re-evaluation quite seriously," said Lacker, who participates in the Fed's policy discussions but he isn't a voting member this year.
The Fed at its March or April meeting likely will want to signal whether it will end the bond-purchase program on schedule or extend it. Any push to renew the program would likely face stiffer resistance. Some Fed members, including Fisher and Lacker, might pressure Bernanke to scale the program back before June.
The Fed has said it will regularly review the program, announced in early November. It is intended to lower rates on loans and boost stock prices, spurring more spending and invigorating the economy.
One of the Fed's main reasons for launching the program is to lower unemployment. The unemployment rate has fallen sharply, from 9.8 percent to 9 percent in the last two months. But it still remains high by historical standards.
Bernanke will provide a fresh assessment of the economy on Wednesday when he testifies before the House Budget Committee. Last week, Bernanke said the economy is improving, but he warned that it will still take several years for unemployment to drop back down to more normal levels.