Atlanta Fed's Lockhart Wants Some (More) Action
Who doesn't want some action? I practically felt him drooling as I read these comments, grab yourself a tissue.
“I am leaning in favor of additional monetary stimulus while acknowledging the longer-term risks the policy may present,” Federal Reserve Bank of Atlanta President Dennis Lockhart said in the text of a speech to be delivered Monday. Lockhart isn’t currently a voting member of the rate-setting Federal Open Market Committee.
“At this juncture, and given the circumstances of sluggish growth and measured inflation that is too low, I give greater weight to the risk of further disinflation leading to deflation,” the official said. Buying long-term assets “is a form of risk management — an insurance policy that is prudent to put in place at this time.”
So what exactly does acknowledging the risk but doing it anyway accomplish? Having an out when it all goes awry later? Being able to say "Hey, I warned you guys that this was dangerous even though I said we should do it anyway"?
Lockhart would also like to see a "more explicit" inflation target as if 2% and MORE isn't explicit enough. Check out The Challenges of Monetary Policy in Today's Economy for more mad money-printing goodness if you aren't dripping with central banker drool at this point.