9:43 AM » Fed's Plosser calls for tapering, then ending QE3
WASHINGTON (MarketWatch) - The Federal Reserve should begin scaling back its quantitative easing program with an eye toward stopping it before the end of the year, said Charles Plosser, president of the Philadelphia Federal Reserve Bank, on Wednesday. The Fed's $85 billion-a-month asset purchases were having little impact on the economy and come with large potential costs, he said. "We also do not know whether the Fed's growing presence in the market for mortgage-backed securities will distort the functioning of this market in the longer run. But with the large volume of purchases the Fed is making, this possibility needs to remain on our radar screen," he said. The Fed is buying $40 billion-a-month of mortgage-related assets under the program. Plosser, one of the most hawkish Fed officials, made the remarks in a speech to a business group in Lancaster, Pa. He is not a voting member of the interest-rate-setting Federal Open Market Committee this year.