Fed officials say communication on stimulus was a problem
Thursday, September 26, 2013 3:33 PM
Two senior officials at the Federal Reserve admitted today that the Fed confused financial markets over whether it would scale back its bond buying, Reuters reported.
Fed Board Governor Jeremy Stein said that whatever decision the Fed came to, it should have been more transparent. The Fed announced its decision last week to keep buying bonds at an $85 billion monthly pace.
"What is much more important is doing everything we can to ensure that this difficult transition is implemented in as transparent and predictable a manner as possible," Stein said at a monetary policy conference in Frankfurt, Germany. "On this front, I think it is safe to say that there may be room for improvement."
This column in CNNMoney asserts that Fed Chairman Ben Bernanke should extend the current bond buying pace until the end of the year if the government shuts down on Oct. 1.
Richmond Federal Reserve Bank President Jeffrey Lacker, though, told a banking conference in Stockholm that the Fed has boxed itself in by failing to taper the program last week.
"It's going to be harder for us to communicate credibly in the future," he said.