A TRIO of U.S. Federal Reserve officials who disagree deeply with one another over the appropriate stance of monetary policy Friday expressed a shared distrust for using interest rates to head off asset bubbles and other forms of financial instability.

    Both Richmond Fed President Jeffrey Lacker, a policy hawk, and San Francisco Fed President John Williams, a centrist, told reporters after a conference that they would not want to risk unmooring the public’s expectation that inflation will rise back to the Fed’s 2 percent goal in the next few years.

    That, Williams said, is what appears to have happened in Sweden and Norway after those countries raised rates to address financial stability risks. Fed economist Andrew Levin had shown a slide making that point earlier at a presentation that both policymakers attended.

    Chicago Fed President Charles Evans, one of the Fed’s most ardent doves, echoed those sentiments.

    “Degrading monetary policy tools to mitigate financial instability risks would lead to inflation below target and additional resource slack,” Evans said in slides released Friday for a talk he is set to give in Istanbul today.

    The role financial instability concerns should play in Fed policymaking has long been a subject of debate at the U.S. central bank. Over the past year, Fed Governor Jeremy Stein has argued strongly that there may be times when the Fed should raise rates to stamp out potential bubbles.

    Stein left the Fed earlier this week to return to his post at Harvard University, leaving the Fed without a forceful public advocate of that idea.

    Philadelphia Fed’s Charles Plosser said Friday he was “kind of on the same page” as Williams and Lacker, in terms of rejecting a financial stability mandate for the Fed.(SD-Agencies)