Dallas Fed’s Fisher Urges Rate Hike on Final Speech

The Federal Reserve should promptly end its easy monetary policy and press ahead with an interest rate hike, followed by a set of gradual moves higher, the head of the Dallas Fed said on Monday in his final speech as a policymaker.

Richard Fisher, president of the Dallas Federal Reserve Bank, shrugged off stagnate wage growth, calling it a lagging indicator, and said inflation will bounce back once energy prices stabilize.

Fisher, an outspoken former banker and U.S. Treasury official who has repeatedly called for the Fed to move faster with a rate hike, is stepping down this month after 10 years at the U.S. central bank.

Despite the views from Fisher and other policy hawks, the Fed has kept rates at near zero since December 2008.

The Fed has signaled that it is prepared to hike rates later this year, with June to September the expected time frame.

“The idea that we can substitute a steeper future funds-rate path for an early liftoff seems risky to me,” Fisher said in remarks prepared for delivery at Rice University in Houston. “I would rather the FOMC raise rates early and gradually than late and steeply.”

The Federal Open Market Committee is the Fed’s policy-setting body.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza