Tags: Fed | Fisher | Easing | Wall | Street

Fed’s Fisher: More Easing Is ‘Wishful Thinking’ by Wall Street

By    |   Thursday, 23 February 2012 09:25 AM

Dallas Federal Reserve Bank President Richard Fisher said additional asset purchases by the central bank are unnecessary and calls for such a move are “wishful thinking” by Wall Street.

“Our job is not to prop up the Street,” Fisher said in an interview on CNBC. “We are working on the real economy.”

Some investment professionals appear to have “wishful thinking” for more accommodation, he said.

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“The tone is a lot better” for economic data, including Thursday’s report that the number of Americans filing first-time claims for unemployment insurance payments last week held at a four-year low, Fisher said.

"The tone is a lot better. It's not brilliant; we don't have enough new hiring taking place, (but we're) definitely moving in the right direction," Fisher told CNBC television.

"Given the improvement in the data that we've seen, things are getting better, not worse. I don't see any need personally for QE3 here," he said, referring to the possibility of a third round of central bond buying, or quantitative easing.

The Fed has held overnight interest rates near zero since December 2008 and has bought $2.3 trillion in government and mortgage-related bonds.

After the central bank's last policy meeting on Jan. 24-25, Chairman Ben Bernanke said policymakers were still debating whether further bond purchases might be warranted.

At that meeting the Fed also said it expected to keep rates "exceptionally low" at least through late 2014, a statement that Fisher cautioned against viewing as an iron-clad promise.

"The intention, as I view it, of the committee is to make sure that we adjust to the real economy, and as new data comes in, more anecdotal evidence on top of that is confirming what the data says, then we will adjust. The question is when," he said,

"I happen to be a little more optimistic about economic movement here" than some others on the Fed's policy-setting panel, said Fisher, who is not currently a voter on the committee.

The Dallas Fed chief said he had told his colleagues at the January meeting that the central bank's post-meeting statement might be unduly dour, given what he was hearing from corporate executives around the nation.

"At the last meeting ... I warned that I thought the statement was talking down the economy," he said.

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