Charles Plosser thinks there’s a ticking time bomb at the Fed - Capitol Report - MarketWatch

Charles Plosser thinks there’s a ticking time bomb at the Fed - Capitol Report - MarketWatch: The way Charles Plosser sees it, the Federal Reserve is sitting on a ticking time bomb that could severely damage the economy unless the central bank reacts quickly to defuse the looming threat.

The Philadelphia Fed president, viewed as one of the bank’s leading hawks, is worried about some $2.5 trillion in “excess” reserves. That is, loanable funds available to individual or corporate borrowers through the nation’s banks.

The Fed has created these reserves through unpredented purchases of U.S. Treasurys and mortgage-backed securities, a strategy known as quantatative easing.

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