Wednesday, February 17, 2010

FT.com / US / Economy & Fed - Lone voice warns of debt threat to Fed

FT.com / US / Economy & Fed - Lone voice warns of debt threat to Fed:

The US must fix its growing debt problems or risk a new financial crisis, Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, warned on Tuesday, adding a mounting deficit could spur inflation.

Mr Hoenig said that rising debt was infringing on the central bank’s ability to fulfil its goals of maintaining price stability and long-term economic growth. “Stunning” deficit projections were putting political pressure on the Fed to keep interest rates low, infringing on its independence at the risk of inflation, he said."

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