WASHINGTON — Few expect any major shifts when the Federal Reserve’s policymaking panel meets this week, even though two of its new voting members have been skeptics of the Fed’s $600 billion Treasury-bond purchase plan.
That could all change by spring, when the Fed must decide whether to extend its bond purchases. Any push to renew the program beyond its scheduled June 30 end date is apt to face stiffer resistance within the Fed.
The Treasury-bond purchases are intended to aid the economy by lowering interest rates, encouraging spending and raising stock prices. But some, such as the two new Fed voting members, warn that the bond purchases could eventually ignite inflation by keeping rates too low for too long.
The Fed’s first meeting of the year will occur today and Wednesday, after which it will issue a policy statement. Among four regional Fed bank presidents who will rotate onto the policymaking group are two who have spoken out against the Treasury- bond plan: Charles Plosser of the Federal Reserve Bank of Philadelphia and Richard Fisher of the Federal Reserve Bank of Dallas.
Plosser and Fisher are likely to oppose any effort to extend the program. They may even pressure Chairman Ben Bernanke to scale it back before June. The Associated Press
