The U.S. central bank is running out of taboos to break. This week, Boston Federal Reserve President Eric Rosengren admitted that the latest quantitative easing broadside would debase the dollar. His counterpart in Minneapolis, Narayana Kocherlakota, traditionally on the hawkish side, said that an above-target inflation rate of 2.25 percent would be tolerable.
Regional Fed bosses have more leeway to speak their mind than, say, Fed Chairman Ben Bernanke - especially when, like Rosengren and Kocherlakota, they’re not currently voting members of the policy-setting Federal Open Market Committee. Their pronouncements still carry weight. Rosengren has a reputation for choosing his words wisely, while the Minneapolis Fed boss is known for vigilance on inflationary threats.
Read more...The latest chapter in the US Federal Reserve's fight against stagnation: embracing inflation
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