Continuing stimulus "threatens the stability of inflation expectations," Jeffrey Lacker says
The Federal Reserve's latest stimulus will not boost economic growth without creating unwanted inflation, said Jeffrey Lacker, president of the Richmond Fed and lone dissenter on the central bank's policy committee.
Lacker said Friday he also opposes the Fed's indication that it expects to keep interest rates near zero until at least mid-2015, and the suggestion that rates will be kept low even as economic growth picks up.
"Improvement in labor market conditions appears to have been held back by real impediments that are beyond the capacity of monetary policy to offset," Lacker said. "In such circumstances, further monetary stimulus runs the risk of raising inflation in a way that threatens the stability of inflation expectations."