Conventional Fed Wisdom, Defied

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By GRETCHEN MORGENSON
Published: August 13, 2011

NEWS last week that the Federal Reserve would keep interest rates near zero until mid-2013 was welcomed by many investors, but the bleak message about the economy still came through loud and clear.

The Fed has spent several years trying to kick-start the economy with low rates and other policies, with little success. Which raises this question: Will more of the same help now?

Among the doubters is Thomas M. Hoenig, the soon-to-be former president of the Federal Reserve Bank of Kansas City. Mr. Hoenig, at the helm of the Kansas City Fed for the last 20 years, has thought long and seriously about the problems facing the central bank, and he spoke with me about them last week after attending his final meeting of the policy-making Federal Open Market Committee. He will turn 65 next month, the mandatory retirement age for a Fed bank president.

Mr. Hoenig has been pretty much alone among Fed presidents in publicly calling to break up large banks that are too big to succeed.

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http://www.nytimes.com/2011/08/14/business/kansas-city-fed-president-defies-conventional-wisdom.html