Plosser, hawkish chief of Philadelphia Fed, to retire in March

Richard Fisher, Fed Chief of Dallas and outspoken critic for TBTF banks, is retiring in April.

(Reuters) – Philadelphia Federal Reserve Bank President Charles Plosser, one of the sharpest internal critics of the central bank’s loose monetary policy, will retire next year in a move that could ease pressure to raise interest rates more quickly.

Plosser, 66, has dissented on policy decisions six times during his eight-year stint at the Fed, including at the central bank’s last two meetings.

He has frequently argued that the Fed’s aggressive easing of monetary policy could spark inflation, and in July and September he broke with colleagues over the central bank’s pledge to keep rates near zero for a “considerable time” after a bond-buying stimulus program ends.

The former economics professor will step down on March 1, the Philadelphia Fed said in a statement on Monday.

The tenor of the debate on the policy-setting Federal Open Market Committee could change with Plosser’s departure and the impending retirement of Dallas Fed chief Richard Fisher, who like Plosser is one of the central bank’s most vocal inflation “hawks.” Both take to the public podium frequently.

“The absence of Plosser and Fisher will certainly be felt,” said OSK-DMG economist Tom Lam. Because of their “hardcore” views, he said, they may play a role in balancing market expectations about a Fed that may otherwise be perceived as dovish.

Although the chiefs of the Philadelphia and Dallas Fed won’t have a vote on monetary policy next year, all 12 Fed bank presidents take part in the central bank’s meetings, and decisions often incorporate views of both voters and non-voters.

Fisher, 65, had said previously he planned to leave the Fed in April. Regional Fed presidents generally face mandatory retirement after 65.

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