The Fed's Richard Fisher: "No QE3"
Though the economy has picked back up since the recession and unemployment rates have fallen, it’s a slow improvement process. The lingering question is whether or not the Federal Reserve will launch another round of quantitative easing.
Plenty of people have been assuming QE3 will happen, especially after the Fed indicated that it would maintain low interest rates through 2014.
But the president of the Dallas Federal Reserve Bank, Richard Fisher, disagrees completely.
“Wall Street keeps dangling QE3 out there. I think it’s a fantasy of Wall Street—it’s not going to happen, it’s not necessary.”
Fisher has been staunchly against quantitative easing from the beginning. He believes that it is not the Fed’s responsibility to deal with these issues, but the responsibility of Congress and the Obama administration.
And besides, the economy is improving more than the Fed originally thought.
Of course, the improvement is slow. The unemployment rate is still high. But it’s doing much better, dropping down to 8.3% in January.
And inflation, for which the Fed set a goal of 2%, is down as low as 0.7%.
With this improvement, Fisher told reporters, “unless there is some extreme crisis that none of us can presently foresee,” QE3 will not occur.
And he made it clear that if another round of easing were to come up, he would not support it.
Philadelphia president Charles Plosser agrees with this. There is no current need for any sort of action on the part of the Fed.
Fisher says this shouldn’t lie in the hands of the Fed anyway.
“If we are to heal the plight of the American worker, our fiscal authorities cannot count on the Federal Reserve to do the job only those authorities can do.”
For now, he believes the Fed should take a step back. The economy is working its way out of the dust, and accruing more debt won’t create long-term benefits.-3
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