Richmond Fed president disagrees with Fed decision

Date: Friday 27 Jan 2012

Federal Reserve Bank of Richmond PresidentJeffrey Lacker, the only member on the Federal Reserve's Open Market Committee (FOMC) that voted against Wednesday's Fed decision, explained his stance today.

He reiterated that he opposed the decision to keep interest rates low through late 2014 because he believes that economic activity will call for a rate increase.

“I dissented because I do not believe economic conditions are likely to warrant an exceptionally low federal funds rate for so long," he explained in a statement on the Richmond Fed website.

"I expect that as economic expansion continues, even if only at a moderate pace, the federal funds rate will need to rise in order to prevent the emergence of inflationary pressures. This increase in interest rates is likely to be necessary before late 2014."

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