by Gary North, Lew Rockwell:
The head of the Federal Reserve Bank of St. Louis has been cautiously critical of Bernanke’s remarks on June 19 regarding the possible early exit by the Federal Open Market Committee from QE3 later this year. Bernanke’s remarks sent world stock and bond prices lower.
A press release explains his concerns.
In his view, the Committee should have more strongly signaled its willingness to defend its inflation target of 2 percent in light of recent low inflation readings. Inflation in the U.S. has surprised on the downside during 2013. Measured as the percent change from one year earlier, the personal consumption expenditures (PCE) headline inflation rate is running below 1 percent, and the PCE core inflation rate is close to 1 percent. President Bullard believes that to maintain credibility, the Committee must defend its inflation target when inflation is below target as well as when it is above target.
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