Preso dall'altro forum
Aug 27 (Reuters) - The U.S. Federal Reserve should launch a fresh round of monetary stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate, a top Fed official said on Monday.
"I don't think we should be in a mode where we are waiting to see what the next few data releases bring," Chicago Federal Reserve Bank President Charles Evans said in remarks prepared for delivery at the Hong Kong Bankers Club. "We are well past the threshold for additional action; we should take that action now."
The U.S. central bank on Aug. 1 kept U.S. monetary policy on hold, leaving interest rates at zero and reiterating the view that economic conditions will warrant keeping them there until at least late 2014.
Many policymakers thought more stimulus would be needed "fairly soon," the minutes of the meeting show, but wanted to watch the data for signs of improvement that would render moot the need for additional easing.
Evans wants no part of that wait-and-see approach.
Like the chiefs of the Fed's regional banks in Boston and San Francisco, Evans sees a case for doing now what the Fed has done only two times before -- buy long-term bonds in an effort to lower long-term borrowing costs.
Evans said he supports an open-ended bond-buying program, an approach that appears to be gaining converts at the U.S. central bank.
The Fed could stop buying bonds after two or three quarters of steady declines in the jobless rate, Evans said, but then should continue to keep rates near zero until the jobless rate -- now 8.3 percent -- falls to 7 percent.
Only in the unlikely event that inflation threatens to rise above 3 percent should the Fed change course, he said.
The Fed has bought $2.3 trillion of long-term securities since the Great Recession in an effort to push down borrowing costs and boost the recovery. Any new bond-buying should focus on housing-backed bonds, Evans said.
Some policymakers, like Dallas Fed President Richard Fisher, worry that piling on more bond purchases will do little to help the economy and could make the Fed's eventual exit from easy-money policy more difficult. Other Fed hawks fret that letting inflation rise even a little could open the door to massive, uncontrolled price rises.
Evans sees the possibility that if unemployment remains too high for too long it could permanently sap the U.S. economy's underlying strength, which is much more worrisome than the prospect of temporarily higher inflation.
"Clear and steady progress toward stronger growth is essential," said the Chicago Fed chief, who will have a vote next year on the Fed's policy-setting panel. "Because we are not seeing that now, I support further use of our balance sheet to provide even more monetary accommodation."
Evans, in his remarks to a seminar run by Deutsche Boerse AG's MNI news agency, said he expects inflation to stay at or below the Fed's 2 percent target in the medium term, even as unemployment stays well above the historical norm.
The Fed should be willing to let inflation rise above the 2 percent target if doing so can help on the employment front, he said, but it should also be clear about how much of a deviation it would tolerate.
The Fed next meets in mid-September, but markets may get a better read on the likelihood of a new round of quantitative easing as soon as this week, when Fed Chairman Ben Bernanke speaks at the Kansas City Fed's annual gathering of policymakers in Jackson Hole, Wyoming.
It was at Jackson Hole in 2010 that Bernanke signaled that a second round of bond-buying was imminent.
Last year the Fed began a program known as Operation Twist, in which it sells short-term securities and buys long-term ones. The aim of the program, which the Fed in June extended through the end of the year, is to put downward pressure on longer-term rates.
"It is time to take even stronger steps," Evans said on Monday.
WORLD FOREX : Euro Ticks Higher on Hopes of Policy Easing
08/27/2012 | 06:35am US/Eastern
By Alexandra Fletcher
The euro made some small gains against most major currencies during European trading Monday as markets waited with baited breath for more monetary easing in the U.S. and the euro zone, but overall trading conditions in the currency markets were thinned as London traders were away due to a U.K. public holiday.
The euro breached $1.2530 against the dollar and ticked higher against the yen, Australian dollar and sterling with a lack of liquidity in the markets and an absence of fresh news drivers. Instead, market participants are looking ahead to Federal Reserve Chairman Ben Bernanke's policy speech at a symposium in Jackson Hole, Wyoming on Friday.
Investors are split over whether Mr. Bernanke will deliver what could be his closing argument in deliberations about launching a third round of bond-buying, or quantitative easing.
"While the Fed has indicated it is prepared to further ease policy if a 'substantial and sustainable strengthening in the pace of the economic recovery' fails to emerge, we think the odds are only 50/50 in terms of a QE3 announcement," said Adam Myers, senior market strategist at Credit Agricole in London.
"Given elevated market expectations of a Fed move, the euro's grind higher against the dollar now looks vulnerable to a correction lower this week," he added.
Hopes are also rising that the European Central Bank will employ a bond strategy at its next policy meeting on Sept. 6 to help beleaguered member states. Investors are looking to the ECB to buy up the sovereign debt of troubled member countries such as Spain and to also consider steps to keep government bond yields from rising too high.
These policy hopes overshadowed signs that the euro-zone's largest economy continues to weaken. German business confidence fell for the fourth straight month in August as companies saw both their current and future economic conditions deteriorating, according to the closely watched Ifo survey.
Elsewhere, the Swedish krona was sent higher against the euro as a rise in July Swedish retail sales figures provided another sign that the country's economy remains resilient to the financial crisis affecting many other European countries. The data helped the Swedish krona reverse a slide against the euro in early trading. The currency strengthened to SEK8.258 from SEK8.273 against the common currency after the retail data was published by the Swedish statistics agency.
At 1003 GMT, the euro was trading at $1.2520 against the dollar, compared with $1.2512 late Friday in New York, according to trading system EBS. The dollar was at Y78.86 against the yen, compared with Y78.70, while the euro was at Y98.53, compared with Y98.45. Meanwhile, the pound was trading at $1.5800 against the dollar, compared with $1.5807 late Friday in New York. The Wall Street Journal dollar index, which tracks the U.S. dollar against a basket of currencies, was at 71.045 from about 71.062.
Write to Alexandra Fletcher at
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