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International Business Machines Corporation Message Board

  • onyxcocktail onyxcocktail Aug 1, 2014 9:01 AM Flag

    Fed's Plosser: Interest rates 'well behind' what is appropriate


    Fed's Plosser: Interest rates 'well behind' what is appropriate

    The Federal Reserve is holding interest rates below the appropriate level, said Charles Plosser, the president of the Philadelphia Fed, on Friday. In a statement explaining in more detail his dissent from the Fed's policy statement on Wednesday, Plosser said that at the beginning of the year he believed that appropriate monetary policy would be to rise to 1.25% by the end of this year and 3.25% at the end of 2015. And that was before the economy surprised to the upside, pushing down the unemployment rate close to where he expected it to be at the end of 2015, Plosser noted. Despite the significant improvement to the economy, Plosser said he dissented because the Fed has not amended its statement that interest rates will remain low "for a considerable time" after it stops buying bonds. "I viewed such language as an inappropriate characterization of the future path of policy and so may limit the FOMC's flexibility going forward," he said.

    Sentiment: Strong Sell

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