The U.S. Federal Reserve will likely begin cutting back on its massive bond-buying program next month, as long as economic data continue to improve, a top Fed official known for his opposition to the program said on Thursday.
Richard Fisher, president of the Dallas Fed, reiterated his preference for the Fed to start cutting back on its bond purchases in an interview on CNBC.
Three other top policymakers this week, including the dovish chief of the Chicago Fed, Charles Evans, Atlanta Fed President Dennis Lockhart, and centrist Cleveland Fed chief Sandra Pianalto, have also suggested they would be open to trimming the Fed's $85 billion in monthly bond purchases starting in September.
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"You heard a choir that may have altos, sopranos, tenors - but we're all singing from same song book," Fisher said in an interview on CNBC.
"It's the same message for you, which is if things go as the (Fed policy-setting) committee expected, then I would expect us to dial back. We will have to see what the data and the feeling is between now and the time we next meet in September."
But, Fisher said, even after the bond buying ends the Fed will keep interest rates low for a very long time, sounding a theme that has become increasingly important for the Fed as it seeks to calm markets fearful of the Fed reducing its monetary policy stimulus quickly.
Bond yields rose sharply after Fed Chairman Ben Bernanke first laid out a timeline for the Fed to exit its bond-buying program mid-year. Markets have since digested the fact that the Fed will eventually end the program, Fisher said, predicting less market volatility when the Fed actually begins to do so.
Bernanke's term expires in January and Fed Vice Chair Janet Yellen and former Treasury Secretary Lawrence Summers are seen as the front runners to succeed Bernanke.
Fisher, who in prior interviews had wondered aloud if U.S. President Barack Obama's pick for Fed chair would be "gender-driven," dodged questions about the subject this time, joking that the obvious pick would be actor Ashton Kutcher, who played Apple co-founder Steve Jobs in the eponymous movie.
Former vice chairs Roger Ferguson and Don Kohn have also been mentioned as contenders for the Fed chairmanship.
Fisher repeated his view that U.S. businesses have had plenty of time to take advantage of low interest rates to improve their balance sheets, and are now "ready to roll" as soon as the U.S. Congress provides more clarity on fiscal and regulatory policy.
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