Fed’s Warsh Wary of Further Asset Purchases
June 28, 2010 by admin · Leave a Comment
The Federal Reserve should be wary of the short-term allure of further asset purchases, said Fed governor Kevin Warsh on Monday.
In a speech in Atlanta, Warsh set a high bar for his support of further asset purchases, saying he would need to be convinced the benefits of the purchases would outweigh the costs of “erosion of market functioning, perceptions of monetizing indebtedness, crowding-out of private buyers, or loss of central bank credibility.”
The Fed has bought over $1 trillion in housing-related assets to keep long-term market interest rates low and support the recovery. The purchases ended in March.
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