Lacker says Fed faces 'intimidation' pressures (by Steve Goldstein)

WASHINGTON (MarketWatch) -- Richmond Fed President Jeffrey Lacker on Monday said the central bank is facing "intimidation" pressure. Republican presidential candidate Rick Perry has said that more bond buying by the Fed would be "almost treasonous," and other presidential candidates have criticized the central bank. "Attempts at intimidation should perhaps not be surprising, given the severe economic stress facing our nation, and the fierce partisan debate that has enveloped economic policy. But these are precisely the times when the governance structure that shields the Fed from such short-term pressures is critically important," Lacker said, according to a prepared text of his remarks delivered at the University of Wisconsin. But he said central bank independence is a double-edged sword, given the ability to circumvent constitutional checks and balances on bailouts. "The pressing challenge now is to learn how to constrain the Fed's ability to allocate credit in a way that preserves the independence of its balance sheet management from political pressures," he said.