July 22, 2008 (LPAC)--Adding his voice to Lyndon LaRouche's call for the Fed to increase interest rates to 4%, Charles Plosser of Philadelphia's Federal Reserve Bank said today that the Fed should raise interest rates "sooner rather than later," in order to lower inflation, and "prevent price expectations from getting out of control." Plosser joins Minneapolis Federal Reserve President Gary Stern and Dallas Federal Reserve President Richard Fisher in echoing LaRouche's demand for emergency stop-gap measures by the Fed.

Plosser had opposed previous Fed rate cuts made earlier this year. Speaking at a breakfast meeting this morning, he argued forcefully that "we will need to reverse course--the exact timing depends on how the economy evolves, but I anticipate [that] the reversal will need to be started sooner rather than later." The collapse of Freddie Mac and Fannie Mae "has shaken confidence in our financial institutions and markets," he said, and heightened the "uncertainty surrounding forecasts for the economy, including my own."

Chief economist at the disintegrating National City Corp., Richard DeKaser, immediately jumped in to say that Plosser's statements aren't "necessarily reflective" of the broader group of Fed policymakers, but he admitted that since "inflationary risks have risen...they want to start laying the ground for eventual rate hikes to come."

The increased support for LaRouche's proposal occurs in the midst of the announcement by the doomed Wachovia Bank (the fourth largest bank in the U.S.) announcing another round of losses with $8.9 billion gone in the second quarter.

 BACKGROUND:

July 19, 2008 -

Fed President Echoes LaRouche's Call for Hiking Interest Rates.

 July 19, 2008 - LaRouche Reiterates Need of Fed Raising Interest Rates to 4 Percent

July 1, 2008 - LaRouche Proposes Emergency Stop-Gap Measures To Prevent Financial Chaos