NEW YORK: In the clearest calls yet by Federal Reserve officials to pump more cash into the , two policymakers said on Friday that more action would likely be needed unless the outlook improves.
William Dudley, president of the Federal Reserve Bank of , described current conditions of high unemployment and low inflation as "unacceptable."
Dudley's comments prompted the dollar to accelerate losses against the euro, traders said, as investors saw an increased likelihood of the Federal Reserve printing more of the currency to buy more assets.
Chicago Federal Reserve Bank President Charles Evans said more easing was "desirable" and framed the debate over further easing by the US central bank as one of "how much" and "how," rather than whether it should take steps in the first place.
The US central bank said at a policy meeting last week that it is ready to help the recovery again if necessary.
It has already cut interest rates to near zero and pumped $1.7 trillion into the financial system through purchases of longer-term Treasury securities and mortgage-related debt in a further effort to lower borrowing costs.
Many analysts expect the Fed to start a new round of bond purchases, or quantitative easing, as soon as early November.
Weak manufacturing and inflation data on Friday also fueled expectations among investors that the Fed may need to step in.
"Further action is likely to be warranted unless the economic outlook evolves in such a way that makes me more confident that we will see better outcomes for both employment and inflation before too long," Dudley told a conference of business journalists in New York.
As head of the most important regional Fed bank, Dudley has a permanent vote on Fed policy. Evans will rotate into a voting seat on the Fed's committee next year. Both are seen as among the more dovish of Fed officials, who tend to be more focused on tackling high unemployment than the inflation hawks.
The comments followed similar remarks by Boston Fed chief Eric Rosengren on Wednesday as the more dovish members of the Fed's policy panel begin to state their case more loudly.
NO CONSENSUS YET
The Fed is split on whether the costs of more Fed outweigh the benefits. Philadelphia Fed President Charles Plosser, seen as being among the hawks, said on Wednesday he does not currently see the case for more action.
Taking a more centrist view, the Cleveland Fed's Sandra Pianalto said on Thursday she was still weighing the effectiveness of policy tools the Fed has available.
The view to watch will be that of Fed Chairman Ben Bernanke, who has not weighed in on the issue since the Fed's last meeting on September 21.
William Dudley, president of the Federal Reserve Bank of , described current conditions of high unemployment and low inflation as "unacceptable."
Dudley's comments prompted the dollar to accelerate losses against the euro, traders said, as investors saw an increased likelihood of the Federal Reserve printing more of the currency to buy more assets.
Chicago Federal Reserve Bank President Charles Evans said more easing was "desirable" and framed the debate over further easing by the US central bank as one of "how much" and "how," rather than whether it should take steps in the first place.
The US central bank said at a policy meeting last week that it is ready to help the recovery again if necessary.
It has already cut interest rates to near zero and pumped $1.7 trillion into the financial system through purchases of longer-term Treasury securities and mortgage-related debt in a further effort to lower borrowing costs.
Many analysts expect the Fed to start a new round of bond purchases, or quantitative easing, as soon as early November.
Weak manufacturing and inflation data on Friday also fueled expectations among investors that the Fed may need to step in.
"Further action is likely to be warranted unless the economic outlook evolves in such a way that makes me more confident that we will see better outcomes for both employment and inflation before too long," Dudley told a conference of business journalists in New York.
As head of the most important regional Fed bank, Dudley has a permanent vote on Fed policy. Evans will rotate into a voting seat on the Fed's committee next year. Both are seen as among the more dovish of Fed officials, who tend to be more focused on tackling high unemployment than the inflation hawks.
The comments followed similar remarks by Boston Fed chief Eric Rosengren on Wednesday as the more dovish members of the Fed's policy panel begin to state their case more loudly.
NO CONSENSUS YET
The Fed is split on whether the costs of more Fed outweigh the benefits. Philadelphia Fed President Charles Plosser, seen as being among the hawks, said on Wednesday he does not currently see the case for more action.
Taking a more centrist view, the Cleveland Fed's Sandra Pianalto said on Thursday she was still weighing the effectiveness of policy tools the Fed has available.
The view to watch will be that of Fed Chairman Ben Bernanke, who has not weighed in on the issue since the Fed's last meeting on September 21.
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