Economics Blog : Fedspeak Highlights: Fisher on Inflation, Mishkin on Home Prices: "Fedspeak Highlights: Fisher on Inflation, Mishkin on Home Prices
Richard Fisher, president of the Federal Reserve Bank of Dallas, says in a speech in London today that his growth forecast “is one of the more bearish” among his colleagues on the Federal Open Market Committee. But he’s also one of the more hawkish Fed officials and devotes most of his remarks to the Society of Business Economists to inflation concerns. Excerpts:
[Richard Fisher]
Fisher
We are confronted with the twin evils of slower growth and higher inflation, while also having to fight a banging hangover that resulted from allowing financial intermediaries to party on too hard for too long. … Even if you foresee the most likely U.S. scenario as a period of flat growth for a few quarters, followed later in the year by a return to potential growth of about 3 percent, one cannot help but worry about whether the so-called tail risk—the odds of the worst-case scenario on the growth distribution curve unfolding—is getting fatter as the inventory of unsold homes continues to swell, consumers’ sense of wealth and businesses’ confidence erodes, and the solicitous bankers that used to court them become more coy….
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