U.S. ECONOMICS: Philly Fed President Plosser Endorses End to QE; Continuation Risks Fed's Credibility


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Philadelphia Fed Chief Executive Charles Plosser, one of the most hawkish members of the Fed, told a Risk Management Association audience today that he expects to see QE end in 2014 in anticipation of the economy reaching a 3% growth rate and 6.25% jobless rate by the end of next year. Plosser believes the Fed should clearly stipulate how many more assets it intends to buy, and then quit when that target is reached. Continuing with what he calls a "bond-buying game by ear" risks the Fed's credibility in financial markets.

Plosser is not currently a voting member, but will join the FOMC at the first meeting in 2014. Given that he has consistently argued against further asset purchases, the bond market registered little more than a hiccup on his remarks. The 10-year note continues to hug the 2.68%/2.70% level, 1-3 basis points richer than on Friday.

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This article appears in: Investing , Commodities

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