Fed leaders split on QE impact

Increasing asset purchases would risk higher inflation, St Louis Fed president James Bullard said yesterday – though Chicago Fed boss Charles Evans said he policy could be extended to provide an extra boost to the economy. “Asset purchases are a potent monetary tool,” said Bullard. “They must be used carefully because increases in the size of the balance sheet entail additional inflationary risks.” However Evans said “additional asset purchases could further firm our commitment to accommodative policy” if current policies do not boost economic growth sufficiently.