Philadelphia Fed President Criticizes Bernanke Policy

In remarks to a gathering of a local chamber of commerce, Philadelphia Federal Reserve President Charles Plosser expressed his sharp disagreement on several issues facing the country’s monetary policy makers. Perhaps his sharpest criticism was directed at the announcement that the federal funds rate would remain low through the end of 2014.

Plosser acknowledged that the announcement included a contingency clause that could be invoked if conditions change, but he saw “ little justification to further ease monetary policy and felt it risked undermining confidence in the process.”

He also disagreed with remarks by other Fed presidents, and indeed President Obama, on the need for more help from the Fed on the housing-price crash. In Plosser’s opinion, “the losses cannot be papered over with monetary policy.”

Plosser, a firm inflation hawk, is happy with the 2% inflation target, but still believes that the Fed needs to “continue to monitor inflation measures very carefully.”

The full text of Plosser’s remarks is here.