Just days after the Federal Reserve launched a third round of bond-buying to boost the lackluster recovery and bring down unemployment, top Fed policymakers on Tuesday disagreed sharply over whether it would work.
The U.S. central bank last week said it plans to buy $40 billion every month in mortgage-backed securities until the labor market improves substantially.
Known as QE3 because it is the Fed's third round of the bond-buying known as quantitative easing, the program is aimed at pushing down long-term borrowing costs and, eventually, stimulate lending, spending and hiring.
Fed policymakers broadly agree that unemployment, at 8.1 percent, is much too high; most agree also that inflation, which has hovered near the Fed's 2 percent target, is well under control.
But there continue to be deep rifts within the central bank over the best policy response.
"I am optimistic that we can achieve better outcomes through more monetary policy accommodation," Chicago Fed President Charles Evans told a group of local business people on Tuesday at a breakfast sponsored by the Bank of Ann Arbor.
Read more: http://www.reuters.com/article/2012/09/18/us-usa-fed-idUSBRE88C04T20120918
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