Ease Off Gas Rather Than Hit Brakes, Says Fed's George
Slowing the pace of bond-buying wouldn't mean tightening monetary policy and would help wean financial markets off their dependence on ultraeasy money from the central bank, one of its senior officials said.
Kansas City Fed President Esther George, who said she supports slowing the pace of purchases as an "appropriate next step for monetary policy," has been a steady critic of the program and has voted against it at every Fed meeting so far this year.
"History suggests that waiting too long to acknowledge the economy's progress and prepare markets for more normal policy settings carries no less risk than tightening too soon," she said in remarks that she had been scheduled to deliver at a luncheon but could not attend because she was ill.
"A slowing in the pace of purchases could be viewed as applying less pressure to the gas pedal, rather than stepping on the brake," George said. "Adjustments today can take a measured pace as the economy's progress unfolds."