In perhaps the strongest repudiation of the US Federal Reserve policy yet, a voting member of the central bank called quantitative easing “A massive gift intended to boost wealth.”
Gift of wealth comes amidst rising inequality
As rising income inequality plagues the US to historic levels, and political leaders look at the issue from a campaign standpoint, such critique of the Fed policy could receive widespread attention. As reported in ValueWalk, a recent study from a global group of economists shows that the United States continues to be the leader in creating income inequality.
The LF Brook Absolute Return Fund lost -2.52% in the second quarter of 2021, compared to a positive performance of 7.59% for its benchmark, the MSCI Daily TR Net World Index. Year-to-date the fund has returned 4.6% compared to 11.9% for its benchmark. Q2 2021 hedge fund letters, conferences and more According to a copy Read More
Speaking to a London group, Richard Fisher, president of the Federal Reserve Bank of Dallas, noted the massive additions to the Fed balance sheet and advocated for a much faster elimination of the Fed’s policy towards quantitative easing, ideally ending in October.
Critical of the Fed’s policy of giving forward guidance
Fisher was also critical of the Fed’s policy of giving forward guidance, according to a report. This is a response to Fed Chairwoman Janet Yellen’s first policy-setting meeting and later press conference, where she indicated the historic bond buying program might come to an end in the spring of 2015.
Discussing the recent adjustment to forward guidance at this week’s FOMC meeting, Fisher said the communication efforts were not clear and actually complicated guidance. The nature of qualitative guidance is broad and sloppy when compared to quantitative guidance, he was reported as saying.
“Is ‘Forward Guidance’ a crotchet …. to which exaggerated importance is attributed?,” Fisher said in the brief prepared remarks. “Have we at the (Fed) just taken up another fad? Or is this a real, lasting practice?”