From the FINANCIAL TIMES:
A leading Fed policymaker called for more monetary stimulus on Tuesday as it emerged that staff at the US central bank have permanently cut their growth forecasts.
In an interview with CNBC, Charles Evans of the Chicago Fed said that he would “favour more accommodation” and became the first policymaker on the rate-setting Federal Open Market Committee to explicitly countenance letting inflation rise above the Fed’s target of 2 per cent in the short-term.
“If 1 per cent was not a catastrophe, 3 per cent is not a catastrophe,” said Mr Evans. Ben Bernanke, Fed chairman, has resisted calls for temporarily higher inflation. While Mr Evans is one of the most dovish members of the FOMC, his comments show the division between hawks and doves at the central bank…
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EDITOR: As noted here again and again (sorry about that!), the monetary approach is a weak and almost futile attempt to do what Congress should be initiating with a stimulus bill, preferably one that would spur infrastructure spending. Only getting people back to work will enable us to eventually balance the budget and pay down the national debt.
