Fed's Plosser opposes more bond buying (by Greg Robb)

WASHINGTON (MarketWatch) -- More asset purchases by the Federal Reserve would not help the economy and would pose substantial risks to the central bank down the road, said Charles Plosser, the president of the Philadelphia Federal Reserve Bank, on Thursday. Some Fed officials argue that the Fed should take further easing steps even if there was only a small chance that it would bring down the unemployment rate. But Plosser said this would only be true if the benefits outweighed the costs. "I believe the extraordinary policies the Fed has pursued pose substantive longer-term risks," Plosser said in a speech to the libertarian Cato Institute here. Plosser also said he opposes setting numerical targets to tell investors what level of inflation or unemployment would cause the Fed to hike interest rates. He said that the Fed should follow some policy rules that are already developed. These rules in general say the Fed should respond swiftly to an upswing in inflation and slowly to a downturn in growth.