Video - Interview with Dallas Fed President Richard Fisher
Considering Bernanke's statement last night that the Fed isn't printing money, we thought it would be interesting to revisit Fisher's comments on the matter.
Quotes inside.
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The Federal Reserve isn’t capable of offsetting the “flood” of U.S. Treasury borrowing with its bond-purchase program, which is helping to revive credit markets, Dallas district-bank President Richard Fisher said.
- “The program has had its impact,” Fisher said today in an interview with Bloomberg Television. “At the same time, you cannot counter this enormous flood” of borrowing “coming from the United States Treasury.”
- The Fed won’t “monetize” the fiscal deficit by effectively printing money to finance the shortfall, and there’s been no “pressure” from the Obama administration to do so, said the Dallas bank chief. Fisher, 60, also dismissed the concerns of some central bank watchers that its record purchases of assets will cause inflation to soar.
- Policy makers are “constantly aware” of the need to consider an exit strategy from their unprecedented emergency initiatives during the crisis, and will end the programs at an appropriate time, he said. “We have to apply our judgment. There’s nothing that tells us how to do this.”
Fisher, who describes himself as among the most hawkish members of the Federal Open Market Committee on inflation risks, said it’s inappropriate to be a “screeching hawk” on price pressures now because of the amount of “slack” in the economy. He said he isn’t surprised by rising yields and reiterated his position that deflation, or an extended and broad decline in prices, is a greater risk than inflation.
“Long term, we all know inflation is a monetary problem, and you could have inflationary pressures,” he said. Still, “that is not the issue right now.”
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