Richmond Federal Reserve Bank President Jeffrey Lacker warned Friday that the Fed is taking undue inflation risks -- both with its asset purchases and with the quasi-commitment to sustained low interest rates it is making through its communications strategy.

Lacker, who has been the lone dissenter on the Fed's policymaking Federal Open Market Committee all year, doubted the third round of "quantitative easing" would do much good and said the concentration on buying mortgage-backed securities is an unwarranted "allocation of credit" by the central bank.

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