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Dissenter Jeffrey Lacker, a voting member of the Federal Open Market Committee, which sets most U.S. fiscal policy, said Tuesday that legislation may be needed to rein in the central bank’s broad lending powers. Lacker, president of the Federal Reserve Bank of Richmond, in September cast the lone vote against the Federal Reserve Board’s latest round of stimulus and has been a vocal opponent of the loose fiscal policies supported by Fed Chairman Ben Bernanke and a majority of the voting FOMC members since the economy nearly collapsed in 2008. Tying Fed policy directly to the U.S. housing market, Bernanke [...]

The Federal Reserve will lose credibility “for decades to come” if it allows inflation to rise temporarily in order to help stimulate the economy, said Jeffrey Lacker, the president of the Richmond Federal Reserve Bank, on Tuesday. In its policy statement in September, the Fed said it would keep rates close to zero even after the recovery picks up. In a speech to the Shadow Open Market Committee meeting in New York, Lacker said it is not clear that this mechanism can work without raising expected inflation. Adopting this strategy without compromising credibility may work in classroom models but not [...]

ROANAOKE, Virginia – The Federal Reserve has tools to raise interest rates when conditions warrant but many are still untested, Richmond Fed President Jeffrey Lacker said on Monday. In particular, Lacker said the central bank has never used the payment of interest on reserves as its primary policy tool. “We’ve never done this before,” he said. (Reporting By Pedro da Costa; Editing by Chizu Nomiyama) The Federal Reserve has tools to raise interest rates when conditions warrant but many are still untested, Richmond Fed President Jeffrey Lacker said on Monday. In particular, Lacker said the central bank has never used [...]

The Federal Reserve’s new round of monetary stimulus is unlikely to do much for economic growth without a damaging rise in inflation, Richmond Fed Bank President Jeffrey Lacker said on Friday. Lacker, an inflation hawk and the lone dissenter on this year’s Federal Open Market Committee, said he opposed the announcement in September of an open-ended bond-buying program targeting $ 40 billion in mortgage securities per month. He also opposes the Fed’s forward guidance on rates, in which policymakers expect to keep rates at very low levels until at least mid-2015. “Such language could be misinterpreted as suggesting a diminished [...]

A voting member of the Federal Reserve’s policy committee cautions that the Fed’s power to fix the U.S. economy now is limited. Jeffrey Lacker, the president of the Federal Reserve Bank of Richmond, says in an interview with The Associated Press that Fed can only do so much to lower the 8.3 percent unemployment rate. “There are a lot of people overestimating the extent to which monetary policy is capable of having any sustained effect on growth or labor markets,” Lacker says. Lacker alone has dissented from the past five Fed statements that sketched out its steps intended to bolster [...]

RICHMOND – The surprising 200,000 net gain in December payrolls was “a heartening sign of a potential firming trend,” said Richmond Federal Reserve Bank President Jeffrey Lacker on Friday. In a speech to financial service professionals, Lacker said he expects only …