Tags: fed | stanley | fischer | unemployment | wages | inflation

Fed's Fischer Sees Lower Unemployment Lifting Wages, Inflation

Fed's Fischer Sees Lower Unemployment Lifting Wages, Inflation
(Dollar Photo Club)

Wednesday, 04 October 2017 10:01 AM

Federal Reserve Vice Chairman Stanley Fischer, who leaves office later this month, continues to expect a tightening U.S. labor market to lift wages and prices even though the process can take longer than anticipated.

“I still believe we will have higher inflation,” Fischer said Wednesday in an interview with Tom Keene on Bloomberg Television. “The basic mechanism here is unemployment is declining all the time, wages will start going up at some stage.”

Fischer, who has announced he’ll depart the Fed on or around Oct. 13, leaves a central bank wrestling with a mystery over why price pressures have remained weak despite the lowest levels of unemployment in 16 years.

“The experience many of us have, including myself, is you have to wait a long time -- usually longer than you expected to wait -- for something to happen,” said Fischer, who surprised Fed watchers in September by announcing he would leave the central bank this month, several months before his expected departure. “But then, if it’s a very basic force, namely increasing employment, increasing wages, it’ll show up.”

Fischer was appointed by President Barack Obama in 2014 to a term as vice chairman that expires in June.

Fischer will depart the Fed just as Randal Quarles appears poised to join the central bank as vice chair for supervision. His nomination is pending confirmation in the full Senate, with a vote scheduled for Oct. 5.

That will still leave three vacancies on the central bank’s Board of Governors. In addition to filling those posts, President Donald Trump can complete a reshaping of the Fed’s leadership if he nominates someone else as chair when Janet Yellen’s term expires in February.

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Economy
Federal Reserve Vice Chairman Stanley Fischer, who leaves office later this month, continues to expect a tightening U.S. labor market to lift wages and prices even though the process can take longer than anticipated."I still believe we will have higher inflation," Fischer...
fed, stanley, fischer, unemployment, wages, inflation
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2017-01-04
Wednesday, 04 October 2017 10:01 AM
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