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QE could still worsen inflation
Quantitative easing in the US could still have the effect of stoking inflation, Federal Reserve hawk Charles Plosser warned yesterday, at a meeting in London. “There’s about $1.5 trillion (£912bn) of what we call excess reserves in the banking system: they’re just sitting there, they’re not creating inflation, at least not yet. But they do have the potential to do that,” he said.