Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said incremental reductions in bond purchases at each Fed meeting may be too small with U.S. growth poised to accelerate this year.
William Dudley, president of the Federal Reserve Bank of New York, said that while harsh weather will slow growth during the first quarter, it won’t harm the economy enough to merit slowing the tapering of bond purchases.
More than five months ago, the Federal Reserve and Office of the Comptroller of the Currency told some of the biggest banks to improve underwriting standards for non-investment-grade loans. The market is showing few signs of tightening as lenders chase lucrative fees.
Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said the Fed should press on with plans to trim its bond purchases with the economy likely to grow about 3 percent this year.
The Standard & Poor’s 500 Index rose to another record and Treasuries fell amid improving U.S. consumer confidence and speculation the Federal Reserve will continue to support the economy. The euro strengthened after data showed faster-than-estimated inflation.
A measure of U.S. corporate credit risk is heading for its biggest monthly drop since October as the Federal Reserve reassured investors that its monetary policy remains dependent on the economy’s progress.