The Fed is growing increasingly splintered as an organization.
The media hasn’t really picked up on this issue yet. But once they do things could become quite problematic for the Fed.
Remember, the primary force that has held the financial system together since the Crash of 2008 was the view that the Fed could backstop everything.
However, dissent is now growing at the Fed… which means it will be harder for it to move forward in a unified fashion.
Consider its recent FOMC minutes released on January 3 2013.
With regard to the possible costs and risks of purchases, a number of participants expressed the concern that additional purchases could complicate the Committee’s efforts to eventually withdraw monetary policy accommodation, for example, by potentially causing inflation expectations to rise or by impairing the future implementation of monetary policy. Participants also discussed the implications of continued asset purchases for the size of the Federal Reserve’s balance sheet. Depending on the path for the balance sheet and interest rates, the Federal Reserve’s net income and its remittances to the Treasury could be significantly affected during the period of policy normalization. Participants noted that the Committee would need to continue to assess whether large purchases were having adverse effects on market functioning and financial stability. They expressed a range of views on the appropriate pace of purchases, both now and as the outlook evolved. It was agreed that both the efficacy and the costs would need to be carefully monitored and taken into account in determining the size, pace, and composition of asset purchases.
Source: Fed FOMC minutes