Atlanta Fed President Lockhart: Tapering Decision "On the Table"
The Federal Reserve's policymaking body, the Federal Open Market Committee (FOMC), could soon consider whether to taper its bond-buying program, said Atlanta Fed President and CEO Dennis Lockhart.
In a December 5 speech before the Broward Workshop in Fort Lauderdale, Florida, Lockhart shared how he is thinking about the winding down of the Fed's asset purchases, popularly called quantitative easing—QE for short. Since launching a third round of QE in September 2012, the U.S. central bank has purchased $85 billion per month of longer-term Treasury securities and agency mortgage-backed securities. "It is appropriate in coming meetings to put a tapering decision on the table as long as the resulting overall posture of policy preserves a high degree of accommodation," he said.
Economy has improved, remains short of victory
The FOMC will likely consider a decision to taper asset purchases in coming meetings, Lockhart said, adding that the economic outlook "justifies consideration of a move." Economic growth should firm up in 2014, along with continued gradual improvement in labor markets. Meanwhile, he expects inflation to move closer to the Committee's 2 percent goal.
Lockhart calls for "as much clarity" as possible
When the time comes to taper, Lockhart supports providing information about the total size of remaining purchases or a timetable for winding down the program. "I favor providing the public as much clarity and certainty as possible about how the change will be executed," he said.
December 19, 2013