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Outgoing Federal Reserve Governor Randall K. Quarles said in his final speech on Thursday that he was “concerned” about the precedent set by the central bank’s massive pandemic monetary stimulus, while other Fed officials warned about higher inflation elsewhere.

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As the Fed’s top regulator—serving as vice president for supervision since October 2017—Quarles was vocal about the central bank’s role and had previously warned about risks to the financial system.

outgoing Fed governor Presented His resignation last month said he has major “concerns” about novel loan facilities created by the Federal Reserve to respond to the pandemic in 2020.

While he “supports” the Fed, using its emergency powers to steer markets and the economy as a “right response”, Quarles says the unprecedented actions will have significant “implications” for the financial system going forward. .

With the Fed directly involved in the allocation of credit to a wide range of businesses, from small to large, it is “both a fiscal and a political action being carried out primarily by an unelected body,” he argues. .

Quarles says there is a need for “a clear understanding” that the central bank should set up similar credit lending facilities in the future, should Congress oversee and transfer money to a non-fed vehicle.

The outgoing Fed governor has also warned about higher inflationary pressures in recent months, a trend now echoed by other governors, including Atlanta Fed Chairman Rafael Boustik on Thursday.


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