Richmond Fed President Jeffrey Lacker is speaking this morning at the Shadow Open Market Committee Symposium in New York ahead of Ben Bernanke’s speech. While we are operating under the belief that the new Fed triggers and thresholds that are starting to be proposed by Bernanke and Yellen, it is important to realize that Lacker is the one dissenting member in the Federal Reserve. His speech, called “The Fed’s Monetary Policy Adrift,” is against the grain of easing measures.

Lacker stated, “Both the FOMC’s articulation of an inflation target and the sense that policy is adrift are related, I believe, to the extraordinary circumstances and resulting policy actions of the last few years.” He believes that by implying a desire to shift the yield curve downward, the language of the latest FOMC statement was phrased as a forecast of future committee behavior. Lacker fears that observers may misinterpret a change in the forward guidance date as a pessimistic shift rather than a clarification. Lacker also brings up the point that near-zero rates could bring up inflation over time.

By now you likely know that Lacker is the “voice against” inside the Fed. Lacker also has spoken today about the asset purchases and the implications, credit market intervention and limiting central bank lending.

FULL SPEECH

JON C. OGG

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