WASHINGTON — Wading deeply into fiscal policy is not normally the domain of the Federal Reserve, but several central bank officials have begun speaking out in forceful terms about the dangers of the expanding deficit. Though only a minority so far, the officials are warning that a failure to bring the budget under control could lead to a dangerous spiral of inflation. Worries about the possible long-term effects of the deficit have galvanized political debate in recent days, culminating in President Obama’s decision to create a bipartisan commission to tame the nation’s debt.
Federal Reserve Officials, Often Tight-Lipped, Openly Voice Deficit Concerns
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