Many economists continue to believe the Fed will alter its forward guidance but Fed speakers have consistently shot it down. If you can change guidance on way? Why not the other? If you’re changing a commitment, is it really a commitment at all?
Other comments from Plosser:
- Doesn’t favor a cap on size of Fed’s balance sheet but fixed amount for QE3 would lend certainty to policy
- Not practical to fine tune QE to economic ups and downs