After recklessly cutting interest rates by 75 basis points, some Fed board members are getting a little nervous about monetary policy. According to the New York Times, resistance is growing to further rate cuts.
It is a little late for a fight against Bernanke's responsibility: $100 oil is already here. Inflation is rising and the Fed is cutting rates.
Within the Fed, Resistance to Further Rate Cuts
By EDMUND L. ANDREWS
WASHINGTON, Nov. 6 — Even if the economy slows sharply in the final quarter of this year, some policy makers at the Federal Reserve are opposed to cutting rates again at their next meeting, in December.
In an unusually blunt interview, the president of the Federal Reserve Bank of Philadelphia said he already expected growth to slow to an annual pace of 1.5 percent or less. But he said he would not support another rate cut unless the slowdown appeared to be even sharper than that.
Charles I. Plosser, president of the Philadelphia Fed, said he “would not be surprised” if fourth-quarter growth was 1 percent to 1.5 percent. “That’s already built into my forecast,” Mr. Plosser said Monday in his office. “The key here is that growth would have to be less than the forecast to cut rates again.”
Few other Fed officials have spoken as bluntly as Mr. Plosser, who is considered among the Fed’s more hawkish policy makers. Still, analysts say he is not alone in his views. “This is one of the most hawkish committees that I can recall,” Laurence H. Meyer, vice chairman of Macroeconomic Advisers and a former Fed governor, wrote in a research note to clients. “The committee is not inclined to ease in December, and it is not convinced that any further easing will be required. However, the market simply refuses to hear it.”
