The US Federal Reserve's $600-billion bond-buying program launched last year helped solidify a shaky economic recovery, which despite headwinds is taking on durable momentum, a top Fed official said on Monday. Atlanta Federal Reserve Bank President Dennis Lockhart said he remained comfortable with his decision early in November to support the second round of the Fed's so-called quantitative easing program, known as QE2.
In order to rejuvenate the economy's feeble recovery. "(T)he economy seems to have gained durable momentum as we begin 2011," Lockhart said in comments prepared for delivery on Monday. "While things are looking better, I don't expect a quick fix," he added. The speech was cancelled due to a snowstorm, but the Atlanta Fed provided a copy of the text to reporters. Lockhart has defended the Fed's latest bond-buying program, putting him on the dovish end of the policy spectrum at the US central bank.
The Fed embarked on the $600 billion round of Treasury securities purchases on November 3. The unemployment rate fell to 9.4 percent last month, a still-high level that's well above what most Fed officials see as healthy. Critics of QE2 warn it lays the groundwork for a sharp ramp-up in inflation, and say it could lead to asset bubbles in unexpected areas of the economy.
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