NEW YORK — The Federal Reserve’s vocal dissenter stood his ground Monday against another round of asset purchases known as quantitative easing, saying engaging in such a program was a “dangerous gamble.”
Investor speculation has swirled in recent weeks that the Fed would engage in additional easing to further push down longer-term interest rates and deliver a jolt to the sagging U.S. economy, but Federal Reserve Bank of Kansas City president Thomas Hoenig continued to insist the asset purchases could pose a threat to the nascent U.S. recovery.
The structural change that has taken place in the U.S. economy since the height of the financial crisis will take time to set in, Hoenig said.
Stoking change with monetary policy is a “bargain with the devil,” Hoenig said Monday at the University of Kansas in Lawrence.
Hoenig is a voting member of the policy-setting Federal Open Market Committee. He has dissented from the majority at every FOMC meeting this year.
Buying a massive amount of what would most likely be U.S. government debt would also ramp up inflation expectations, Hoenig said.
