Finally, someone at the Fed is dissenting from the Bernanke plan to buy every asset in sight. In a recent speech, Charles Plosser of the Philadephia Fed said:

“Without the target funds rate as a nominal anchor, it will be important for us to develop relevant quantitative measures to assess the appropriate size and composition of the Fed’s balance sheet,” Plosser said.

“We must ensure that our overall balance sheet’s size and evolution are consistent with our responsibility to promote price stability. Credit policy alone is not sufficient to ensure sound monetary policy,”

Berananke has said he’s not worried about the size of the balance sheet, so Plosser is not on the same page and seems concerned about the inflationary consequences of what they are doing. He’s also worried about how to unwind this mess and the political pressure to keep lending:

“Will we face challenges when we attempt to liquidate these longer-term assets from our portfolio? Will there be pressure to extend some of these programs by observers who feel terminating the programs might disrupt fragile markets?”

Former St. Louis Fed President William Poole is also worried:

“I would say if the policy is not reversed, there is a high probability that the unpleasant risk of inflation materializes.”

The Fed has been fairly compliant so far about what Bernanke’s programs, but that may be coming to an end. Let’s hope its not too late.