The Federal Reserve announced prior to Christmas that it would begin tapering its $85 billion per month quantitative easing initiative by $10 billion. Prior to Fed Chair Ben Bernanke exiting, he confirmed the institution would be increasing the taper figure by an additional $10 billion, which would reduce the monthly bond-buying program to $65 billion.
Economic Collapse News reported Monday that Peter Schiff, president of Euro Pacific Capital, argued that the Fed would likely end its tapering and actually increase it because the stock market depends on its monthly injections of Fed stimulus.
On Tuesday, Federal Reserve Bank of Richmond President Jeffrey Lacker, who has been a critic of Bernanke’s and the monetary stimulus, told reporters following a speech in Winchester, Virginia that any declines in the global stock market wouldn’t deter the central bank from ending its tapering.
“The hurdle ought to remain pretty high for pausing in tapering,” said Lacker, who reportedly doesn’t vote on policy this year. “We linked the asset purchase programs to significant improvement in the outlook for labor market conditions. That has definitely occurred.”
The Fed currently maintains a $4 trillion balance sheet and it is projected to increase to more than $6 trillion over the next few years. It has been hinted by the new Fed Chair, Janet Yellen, that she isn’t afraid to print even more money in order to keep the stock market bubble afloat.
Early last year, Lacker said he would end QE immediately if he were dictator of the United States. In fact, Lacker has been one of the very few on the Federal Open Market Committee to openly criticize QE for a long time.
“I wouldn’t have gone down this asset-purchase path. I’m in the camp that we should taper and stop right now,” Lacker said in an interview on CNBC in April. “You have to prepare markets, if it was up to me, if you made me dictator, that’s what I would do.”