Tags: fisher | economic | outlook

Fisher: Glass Is Very Much Half-Empty

By Dan Weil   |   Thursday, 16 Apr 2009 09:51 AM

Somebody forget to tell Richard Fisher that things are turning around.

The Dallas Federal Reserve Bank president has a very bleak view of the U.S. economy. An inflation hawk, his outlook suggests a turnaround on zero interest rates is remote for now.

“The economic data in the U.S. are quite grim, and I expect a contraction at an equally dismal rate in the first quarter,” Fisher said in a speech in Hong Kong.

The economy shrank at an annual rate of 6.3 percent in the fourth quarter. Economists surveyed by Bloomberg produced a median forecast of a 5 percent contraction for the first quarter.

As for Fisher, he repeated his view that the unemployment rate could top 10 percent this year.

Fisher, who in the past has been one of the Fed’s most vigilant inflation hawks, says the Fed’s massive easing program should help pull the U.S. out of recession.

And the $787 billion fiscal stimulus should start having an effect this quarter, he said after the speech in an interview with Bloomberg Television.

Fisher’s forecast for the jobless rate to breach 10 percent goes far further than that of any other Fed official.

Unemployment totaled 8.5 percent in March, the highest in 26 years.

Fed Chairman Ben Bernanke has a brighter view of the economy than Fisher.

“I am fundamentally optimistic about our economy,” Bernanke said in a speech Tuesday.

He sees signs that the “sharp decline” in the economy is slowing, indicating a potential “first step” toward rebound from recession.

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Somebody forget to tell Richard Fisher that things are turning around.The Dallas Federal Reserve Bank president has a very bleak view of the U.S. economy. An inflation hawk, his outlook suggests a turnaround on zero interest rates is remote for now. “The economic data in...
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