Fed Hawks Fear Inflation as Bernanke Backlash Might Build

“Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank’s easy monetary policy, in comments suggesting Fed Chairman Ben Bernanke may face more dissent this year.

In remarks that stamped her as a hawk on the Fed’s policy-setting committee, Kansas City Federal Reserve President Esther George warned that the Fed’s near-zero interest-rate policy — aimed at boosting the economy — could spark inflation.

“A prolonged period of zero interest rates may substantially increase the risks of future financial imbalances and hamper attainment of the 2 percent inflation goal in the future,” she said in her most extensive remarks in a year on policy….”

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