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JEREMY HOBSON: Well when Congress returns to work this week in Washington, Fed Chairman Ben Bernanke can expect the criticism of his easy money policies to increase. He’ll be feeling the heat not just from members of Congress but from his own colleagues inside the Federal Reserve. There are new Fed members this year who aren’t sold on the central bank’s strategy of flooding the economy with cheap money.
Our Washington Bureau chief John Dimsdale has the story.
JOHN DIMSDALE: One new Fed voting member is Charles Plosser. He heads the Philadelphia Federal Reserve. In a speech last month, Plosser laid out his concerns with the Fed’s decision to buy billions more in Treasury bonds.
CHARLES PLOSSER: I am still somewhat skeptical that we will see much of a stimulative effect from this new round of purchases.
The increased internal criticism of Fed policy offers hope to those who think the Central Bank is risking runaway inflation.
CHARLES CALOMIRIS: With those additional members who have been opposed to quantitative easing there’s a chance that we could see some change.
Columbia Business School professor Charles Calomiris says Congress will also pressure the Fed this year, especially when a Texas Representative who wants to get rid of the Fed takes over the House committee responsible for overeeing it.
CALOMIRIS: Now that you’ve got Ron Paul breathing down Ben Bernanke’s neck, I think there is also going to also be a desire to be responsive to external critics a little bit.
The Fed’s easy money lasts until June and Calomiris hopes the new voting members can put a premature end to the policy.
In Washington, I’m John Dimsdale for Marketplace.
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