The article about Plosser I’m looking at is this one on Bloomberg.com. In the article, Plosser is quoted as saying:

I would like to see us begin to scale this thing back beginning even as early as the next meeting

The costs of bond buying exceed the gains. The purchases are risky and offer pretty meager benefits

If the economy weakened and the central bank needed to provide further stimulus, policy makers will be kind of limited in their options

Still, inflation expectations look pretty well-anchored

We have to defend our inflation target both on the upside and the downside. As long as inflation expectations remain well-anchored then I’m reasonably comfortable.

Added editorial by the author of the article:

While the unemployment rate has moved toward the Fed’s goal of 5.2 percent to 6 percent during the past year, inflation has fallen further from the Fed’s long-run target of 2 percent. Inflation dropped to 1 percent from a year earlier in March, the slowest since 2009, according to the Fed’s preferred inflation gauge.

So, the Fed’s long-run inflation target is 2% and yoy is currently 1%. Plosser says that the Fed has to defend the upside and the downside of the target.  The Fed’s goal for unemployment is 5.2% to 6%, and it is currently 7.5%. But he wants to taper QE3. Why?

He doesn’t think QE3 does much. But if the economy weakened, the Fed’s back would be against the wall?

If it doesn’t do much then why worry? Only if the Fed already owned planet Earth and everything on it would the Fed’s back be against the wall.

What are the costs? He doesn’t say, but I think the gain of not being in the same condition as the Eurozone is worth whatever it takes.

Inflation is drifting downward, 50% below the Fed’s target. Employment isn’t where the Fed has said it wants it to go.  Plosser even says he’s reasonably comfortable as long as inflation expectations remain anchored – when they are.

It doesn’t make any sense. I think, however, that the only reason we’re the best looking horse in the glue factory, instead of out playing in the pasture already probably has to do with these Fed presidents who spout nonsense for no good reason except to hear themselves talk.

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