Now! wait! Fed still divided but hey, that's 'healthy'
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The latest speeches from Federal Reserve officials show policy makers still remain divided on what to do.
Philadelphia Fed President Charles Plosser said the Fed should start reducing the size of its "quantitative easing" bond-buying program and stop its purchases completely by the end of the year.
In a speech at a conference in Jackson Hole, Wyo., Plosser said, "It is time to exit from the asset purchase program in a gradual and predictable manner."
He also argued the Fed should commit to tightening policy when the unemployment rate falls to a 6.5-percent "trigger" level.
Plosser's proposal appears to run against the grain of most other U.S. monetary policy makers, who have increasingly stressed that interest rates could well stay near zero well after the U.S. jobless rate hits that level.
Meanwhile, St. Louis Fed President James Bullard said the substantial rise in bond yields since last month is not justified by an improvement in U.S. economic data or a rise in inflation, warning it reflects optimism that may prove to be too rosy.
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