By Pat Loeb
PHILADELPHIA (CBS) — The president of the Federal Reserve Bank of Philadelphia today used one of his final public talks about the economy to once again take his colleagues to task.
Charles Plosser (at lectern and on giant screen) told the Greater Philadelphia Chamber of Commerce that the nation’s economy has done better than expected in the last year, with strong consumer and business spending, low unemployment, and steady growth.
But rather than giving his Fed colleagues credit, he says it means they should change the way they do business.
“The economy has returned to a more normal footing,” he said at the Chamber of Commerce breakfast. “I believe that monetary policy should follow suit.”
To Plosser, an inflationary hawk who has frequently voted against the Fed’s loose money policies, that means adopting rules for setting monetary policy rather than choosing, in his words, “whatever action seems appropriate or convenient at the time.”
“Rules act as restrictions on policymakers’ choices– limiting the degree of discretion,” he said. “Some people look at this as a bad thing, but it’s not a bad thing. It can result in better economic outcomes in the long run.”
Plosser spoke after a bank analyst presented the 2015 Economic Outlook survey of the region’s businesses. Three quarters of the businesses surveyed reported better business conditions in the region in 2014 compared to 2013. Just ten percent reported worse conditions.
The survey found stronger business activity in 2014 and forecasts even stronger activity for 2015.
Plosser is running out of time to influence the bank. He retires March 1st.
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