Livin’ It Up at the Hotel CaliforniaBlogs, Resources — By Theodore Phalan on December 14, 2012 at 11:09 AM
(Reuters) – The Federal Reserve’s latest moves to reduce borrowing costs and boost the economy could be hard to reverse, a top Fed official said on Friday.
“I argued that basically we were at risk of what I call a ‘Hotel California’ monetary policy,” Dallas Fed President Richard Fisher said in an interview on CNBC. Like the Eagles song of that name, he said, “You can check out any time you want, but you can never leave.”
Fed decided on Wednesday to maintain its monthly asset purchases of $45 billion of Treasury bonds and $40 billion of mortgage-backed securities, until it saw a substantial improvement in the outlook for the U.S. labor market.
The moves will swell the Fed’s balance sheet, making it hard to make an eventual exit, Fisher said. …