In interviews with Bloomberg’s Kathleen Hays and Vonnie Quinn on Bloomberg Radio and with Bloomberg’s Michael McKee on Bloomberg Television this morning, Philadelphia Federal Reserve President Charles Plosser said the Fed should begin shrinking balance sheet.

Charles Plosser: Fed Should Begin Shrinking Balance Sheet

The departing Philadelphia Federal Reserve Bank President Charles Plosser said:

  • Disappointing January retail sales figures are nothing to get ‘too excited about,’ “I don’t get too excited about one month’s numbers.”
  • Consumer in better shape than in long time.
  • Can’t justify zero interest rates in current economy.
  • Inflation weakness driven by drop in energy prices.
  • I don’t believe deflation is a risk for U.S. economy.
  • There is ‘no theory’ that justifies zero interest rates in current environment.
  • Much of the weakness in inflation driven by energy prices.
  • FOMC should drop reference to ‘patient’ from policy statement.
  • There are lots of unknowns, We are in uncharted territory
  • “We cannot get back to a normal monetary policy until we shrink the balance sheet.”
  • Fed has challenges as institution
  • I don’t regret any dissents, “I think I voted what my conscience told me was the right thing to do at the time.”

Charles Plosser: No Deflation Risk, Time To Raise Rates