Three Federal Reserve Bank presidents were scheduled to deliver speeches today. Two have already done so: Eric Rosengren of the Boston Fed and Sandra Pianalto of the Cleveland Fed. Rosengren is a voting member of the FOMC this year and both he and Pianalto have supported the Fed’s latest round of asset purchases and continue to do so.
While neither changed his or her basic position today, both did indicate that if the employment picture continues to brighten, then the Fed could consider slowing the $85 billion monthly asset purchases. Fed Chairman Ben Bernanke has been firm in his conviction that the unemployment rate needs to come down far lower than it is today and that it needs to remain low for some period of time before the asset purchases are stopped.
The reality is that the U.S. economy is not likely to improve fast enough in 2013 to justify slowing or stopping the purchases, so what Rosengren and Pianalto said today is almost purely academic.
Later today we’ll hear from Narayana Kocherlakota of the Minneapolis Fed, who has been a strong supporter of the Fed’s current policy and is likely to offer an even more dovish view on the asset purchases