San Francisco Fed's Pres Defends Aggressive Policies
By Joseph Orovic | February 25, 2012 8:39 AM EST
Williams defended the Federal Reserve's decision to buy mortgage-backed securities to prop up the housing market, keep interest rates low and stimulate the economy.
"Purchases of mortgage-related securities appear to have reduced mortgage rates significantly, making them particularly useful given the weakness in the housing sector," he said, according to the prepared text of a speech he delivered at the Monetary Policy Forum in New York.
Williams shied away from drawing a connection between the economic travails and recoveries occurring in the U.S. and Europe, according to the Wall Street Journal.
"The dispersion of economic performance across the U.S. is far less extreme than it is in Europe today," he said, adding dispersion in the U.S. is "not anywhere near as great as it is in Europe."
The Fed has been scrutinized for its aggressive policy decisions since the economy tanked in 2008.
Saying the "monetary transmission mechanism is partially clogged," Williams defended the Fed's announcement last month it would keep interest rates near zero until 2014.
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