英语文摘：U.S. Fed governor doubts QE rationale

WASHINGTON, Nov. 8 (Xinhua) -- Kevin Warsh, a member of the Board of Governors of the U.S. Federal Reserve, doubted the effectiveness and uncertainties of the second round of quantitative easing (QE) taken by the U.S. central bank recently.

Given what ails us, additional monetary policy measures are " poor substitutes for more powerful pro-growth policies." The Fed can lose its hard-earned credibility -- and monetary policy can lose its considerable sway -- if its policies "overpromise or under deliver", Warsh said in an article on Monday's Wall Street Journal.

The Federal Open Market Committee (FOMC), the interest rate policy making body of the central bank, announced on Nov. 3 to start a controversial plan of buying 600 billion U.S. dollars in Treasury bonds till the second quarter of 2011, known as the " Quantitative Easing" (QE2) monetary policy, in a bid to jumpstart the sluggish U.S. economic growth, which has invited wide concerns and criticism both at home and abroad.

"I consider the FOMC's action as necessarily limited, circumscribed and subject to regular review. Policies should be altered if certain objectives are satisfied, purported benefits disappoint, or potential risks threaten to materialize," noted Warsh.

He contended lower risk-free rates and higher equity prices -- if sustained -- could strengthen household and business balance sheets, and raise confidence in the strength of the economy. But " if the recent weakness in the dollar, run-up in commodity prices, and other forward-looking indicators are sustained and passed along into final prices," the central bank's price stability objective might no longer be a "compelling policy rationale."

The U.S. central bank cut the interest rate to the history's lowest level in December 2008 to cope with the worst recession after the Great Depression in the 1930s. And it has purchased about 1.7 trillion dollars in U.S. government debt and mortgage- linked bonds, known as the QE1.