Fed Official Raises Doubts Over New Fed Program

By: Associated Press
By: Associated Press

Washington, D.C. (AP) - A Federal Reserve official with a close
working relationship with Chairman Ben Bernanke is expressing
skepticism over the Fed's new $600 billion program to bolster the
economy.

Kevin Warsh, a Fed governor, warns that there are "significant
risks" associated with the Fed's bond-buying program, including
the potential for triggering inflation.

The Fed's program, announced last week, is aimed getting
Americans to spend more and invigorate the economy by making loans
cheaper. But Warsh doubts the program will have "significant" or
"durable benefits" for the economy. Despite his reservations,
Warsh voted for the program.

During the 2008 financial crisis, Warsh worked closely with
Bernanke to craft programs to get credit -- the economy's oxygen --
to flow again.

(Copyright 2010 by The Associated Press. All Rights Reserved.)


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