Charles Plosser, president of the Federal Reserve Bank of Philadelphia, says he voted against the Fed's latest attempts to boost the economy because he fears they could backfire and unleash inflation.
The Fed's policy committee voted 7-3 last week to try to lower long-term interest rates by reshuffling its investment holdings. The Fed will shift $400 billion from short- to long-term Treasurys.
Plosser becomes the second of the three dissenters to explain his no vote. On Tuesday, Dallas Fed President Richard Fisher said he feared the Fed's action would fail and hurt banks.
In remarks prepared for a speech Thursday outside Philadelphia, Plosser says the Fed's attempts to lower rates are unlikely to work and could escalate inflation, potentially leading to "stagflation" _ high prices, low growth and high unemployment.