Fisher says Fed must not fall behind the curve in increasing rates
Dallas Fed President, Richard Fisher, has said that the Federal Reserve must not fall behind the curve in its decision to start increasing interest rates. Fisher cited strong US economic growth and wage-price pressures.
Fisher, who is considered to be hawkish, has advocated for a monetary policy that prevents inflation. He has said that recent economic reports show that US second quarter growth was “uber strong”, with the upward revision last week to an annualized rate of 4.6 percent, compared to the 4.2 percent previously forecast.
Fisher also pointed to surveys of wage-price pressures in Texas, Louisiana, and New Mexico, which are at the highest levels since before the recession.
He expressed his concerns in an interview with Fox News, where Fisher said:
“I think we could suddenly get a patch of high growth, see some wage-price inflation, and that is when you start to worry.”
Fisher also expressed his opinions on Sept. 17 at the Federal Open Market Committee. The Fed said that they would be keeping rates near zero for “considerable time” after completing its asset purchases halt at the end of October.
On Monday the Dallas district will report its September manufacturing index. Economists forecast it will increase to 10.5 compared with a prior reading of 7.1. In addition, on Sept. 30, the Dallas Fed will be releasing its Texas Service Sector Outlook Survey.