By Dow Jones Business News, September 26, 2013, 06:07:00 AM EDT
By Charles Duxbury
STOCKHOLM--The head of the Federal Reserve Bank of Richmond Thursday confirmed his support for a swift draw-down of
the Fed's bond-buying program and said he was surprised that process hadn't started already.
Jeffrey Lacker told reporters here that his own view is that a reduction in the central bank's $85 billion-a-month
asset purchases could still come this year.
"I don't see any reason why we couldn't do it in December or potentially in October depending on what the data look
like," he said.
The aim of the asset-buying program is to stimulate the economy by holding longer term interest rates low.
Mr. Lacker has long questioned the effectiveness of the program and never wanted it to start.
Markets have been turbulent since May when the Fed signaled it could soon start scaling back the program. Mr. Lacker
said he went into the September meeting of the bank's policy setting committee expecting to see a vote in favor of such
He said the unemployment rate had been coming down rapidly and it looked set to get to 7% in the first quarter.
"The chairman [Ben Bernanke] after the June meeting said he expected the program to end around the time unemployment
was 7% so I expected the committee to decide to reduce the pace of purchases in September and I was surprised they
didn't do that," Mr. Lacker said.
Markets were also surprised and Mr. Lacker acknowledged that this might make hard to start tapering in October without
the policy committee feeling it was "losing face".
However, he added that in principle there is no reason why the committee couldn't start to taper then.
Write to Charles Duxbury at firstname.lastname@example.org
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