Fed’s Plosser Says Stimulus May Backfire, Fuel Inflation – Bloomberg 01-11-13

Salient to Investors:

Charles Plosser at FRB of Philadelphia said:

  • The latest stimulus steps do little to boost growth and the record stimulus risks a surge in inflation, and may not speed up the economy but actually prolong it.
  • Low interest rates reduce returns for savers and do little to encourage businesses to expand payrolls or invest in new ventures.
  • Halting additional bond purchases makes sense because their benefits are pretty meager and there are many risks including disruptions in the economy.
  • Unemployment will drop to near 7 percent by year’s end and US growth will rise to 3 percent in 2013.
  • Inflation will remain at moderate levels in the near term.

Read the full article at http://www.bloomberg.com/news/2013-01-11/fed-s-plosser-says-stimulus-may-backfire-fuel-inflation.html.

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