Two top Federal Reserve officials offered widely different endorsements of more U.S. policy easing on Monday, with one weighing the benefits and risks of more action and the other stressing the need to act now.
Cleveland Fed President Sandra Pianalto and Charles Evans of the Chicago Fed bank, however, largely stuck to their previous stances, offering little insight into whether the U.S. central bank will ultimately do more to help the recovery.
With economic growth slow and unemployment high, economists see a decent chance that the Fed could launch a third round of asset buying, known as quantitative easing (QE3), when it meets next month.
But there are both benefits and limits to such a move, said Pianalto, a voter this year on the Fed's policy committee. "I am supportive of actions that provide economic benefits with manageable risks," she told a business audience in Newark, Ohio.
"Monetary policy should do what it can to support the recovery, but there are limits to what monetary policy can accomplish," Pianalto added.
While Pianalto is considered a centrist in the spectrum of Fed policymakers, Evans is firmly on the "dovish" wing, pushing for more action immediately to bring down the 8.3 percent jobless rate.
"I don't think we should be in a mode where we are waiting to see what the next few data releases bring," Evans told a seminar at the Hong Kong Bankers Club. "We are well past the threshold for additional action; we should take that action now.
Read more: http://www.reuters.com/article/2012/08/27/us-usa-fed-idUSBRE87Q10620120827
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