St. Louis Federal Reserve President James Bullard in a statement released Friday criticized Ben Bernanke for speaking publicly about the Fed’s plan to draw down its $85 billion-per-month bond-buying program by mid-2014 (provided unemployment falls to about 6.5 percent).
“President Bullard felt that the Committee’s decision to authorize the Chairman to make an announcement of an approximate timeline for reducing the pace of asset purchases to zero was a step away from state-contingent monetary policy,” the statement continues.
“President Bullard feels strongly that state-contingent monetary policy is best central bank practice, with clear support both from academic theory and from central bank experience over the last several decades. Policy actions should be undertaken to meet policy objectives, not calendar objectives,” it adds.
Following the release of the Feds’ FOMC statement Wednesday, chairman Bernanke spoke at length about “tapering” the Fed’s commitment to bond purchases. And U.S. markets reacted very poorly to his comments with all three major U.S. stock indices posted huge losses Thursday.
“President Bullard also felt that the Committee’s decision to authorize the Chairman to lay out a more elaborate plan for reducing the pace of asset purchases was inappropriately timed,” the statement reads.
“President Bullard felt that a more prudent approach would be to wait for more tangible signs that the economy was strengthening and that inflation was on a path to return toward target before making such an announcement,” it adds.
As noted by Business Insider, Bullard’s decision to release a statement criticizing Bernanke for speaking to the press about the “tapering” timeline is, well, an “unusual move.”
Here’s the full press release:
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