Canada's Flaherty thinks Fed should taper as quickly as possible

Mon Oct 14, 2013 5:12pm EDT
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By Louise Egan

WASHINGTON (Reuters) - Canada's Finance Minister Jim Flaherty said on Thursday the U.S. Federal Reserve should exit from its massive bond-buying program as quickly as possible, saying he never supported the printing of money in order to stimulate the economy.

"I don't think they should have done it in the first place," he told reporters, referring to the Fed's $85 billion-a-month bond buying program.

"Now that they've done it they should get out of it as quickly as they can," he said.

Flaherty had mentioned in previous remarks that he did not support quantitative easing by central banks but had never offered an opinion on how the United States should act now that it has undertaken the unconventional policy.

"It's a short-term remedy that has long-term consequences and for that reason I am not a supporter of quantitative easing."

"It's not to say that in a time of crisis as we had several years ago that we ought not to act, which we did, but it is to say that as long-term government policy, these debt creations have consequences and none of them are good, including inflation," he said.

Asked what he thought about U.S. President Barack Obama's choice of Federal Reserve Vice Chair Janet Yellen, considered a dove, as the next Fed chairman, Flaherty was more reserved.

"The choice of the chairman of the reserve bank is the president's choice and he made his choice."   Continued...