Bernanke makes strong defense of Fed rate policies

The Fed’s decision last month to launch a new mortgage-buying program was approved by its policy committee, 11-1. Jeffrey Lacker, head of the Federal Reserve Bank of Richmond, cast the lone dissenting vote. Lacker has argued that further bond buying won’t likely provide much economic help and risks igniting inflation in the future.

Charles Plosser, president of the Fed’s Philadelphia regional bank, and Richard Fisher, president of the Fed’s Dallas regional bank, have also been critical of the Fed’s bond purchases. Plosser and Fisher do not have votes on the Fed’s policy committee this year but take part in the discussions.

At the same time, one Fed official who had been skeptical of the bond buying now appears more open to it. Narayana Kocherlakota, president of the Minneapolis Fed, has signaled that he’s grown more concerned about the economy’s sluggish growth. In a speech a week after last month’s policy meeting, Kocherlakota said the Fed should fight high unemployment with an even more aggressive approach than it announced.

Still, like Plosser and Fisher, Kocherlakota lacks a vote on the Fed’s policy committee this year.

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