Ann Saphir and Pedro Nicolaci da Costa
December 3, 2011
The U.S. Federal Reserve and other central banks must not succumb to calls for additional help from monetary authorities in the face of high budget deficits, two top Fed officials said on Friday.
Using the Fed as a printing press to solve the U.S. deficit problem would unleash the “sinister beast” of inflation and “is not an option,” Dallas Fed President Richard Fisher told the Dallas/Fort Worth Minority Supplier Development Council.
“Our nation has a crying need for public leadership to correct what’s wrong in the economy,” Fisher said. Monetary policy, he said, “cannot do it alone,” but “must be complemented by responsible fiscal policy.”
Fellow inflation hawk Philadelphia Fed President Charles Plosser told a conference at his bank’s headquarters that any attempt to “resort to the printing press” to avoid budget trouble was doomed to failure and could lead to hyperinflation.
This article was posted: Saturday, December 3, 2011 at 8:01 am