Tags: Fed | Fisher | Inflation | growth | economy

Fed’s Fisher: Inflation to Fall Amid 'Anemic' Growth

Monday, 03 Oct 2011 11:50 AM

Inflation will fall toward 2 percent from current levels of 3 percent and the U.S. economy should continue growing although slips are possible, says Dallas Federal Reserve Bank President Richard Fisher.

Growth for the rest of the year will probably be "positive but anemic," at less than 2 percent, however, "we could slip," Fisher tells CNBC, adding he opposes a further round of quantitative easing at this point.

"The more we do [in terms of monetary intervention], the more the risk of creating more uncertainty," Fisher says.

fisherfed200.jpg
Richard Fisher
(Dallas Federal Reserve Bank file photo)
"Liquidity is abundant and cheap. It needs to be put to work. Whatever we do has to have a complementary side, a fiscal policy that channels it properly."

That Federal Reserve has carried out two rounds of quantitative easing — asset purchases from banks with the aim preventing deflation while also incentivizing investing and ultimately hiring and economic growth — and has also shuffled its Treasury portfolio around to keep long-term interest rates low.

Critics say quantitative easing programs may have steered the country away from deflation, but have not led to lower unemployment rates while they have laid the groundwork for inflation down the road.
Republicans have urged the Federal Reserve not to roll out a third round in the future.

"Although the goal of quantitative easing was, in part, to stabilize the price level against deflationary fears, the Federal Reserve’s actions have likely led to more fluctuations and uncertainty in our already weak economy," according to a letter to Fed Chairman Ben Bernanke signed by Senate Minority Leader Mitch McConnell, House Speaker John Boehner, Senator Jon Kyl and House Majority Leader Eric Cantor, according to Bloomberg.

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Inflation will fall toward 2 percent from current levels of 3 percent and the U.S. economy should continue growing although slips are possible, says Dallas Federal Reserve Bank President Richard Fisher. Growth for the rest of the year will probably be positive but anemic,...
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Monday, 03 Oct 2011 11:50 AM
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