Federal Reserve Bank of Dallas President Richard Fisher said Friday he supports ending the central bank’s bond-buying stimulus program this year, while adding it is very likely that very low interest rates will prevail for some time to come.
“There is abundant liquidity to finance economic expansion, and the [Federal Open Market Committee] will assure that it remains affordable as long as the prospect of inflation rising above its 2% target remains in abeyance,” Mr. Fisher said in the text of a speech prepared for delivery before a local group in New Orleans.
Mr. Fisher is a voting member of the Fed’s monetary-policy setting FOMC this year. He has been a persistent critic of the recent round of Fed moves to stimulate growth, done mainly by buying longer-dated Treasury and mortgage bonds in a bid to lower borrowing costs to stimulate growth and lower unemployment. Heartened by signs of economic improvement, the Fed has been cutting the pace of its bond-buying program this year — the monthly buying rate now stands at $45 billion — and officials broadly agree the effort will be wound down this year.
“Barring some destabilizing development in the real economy that comes out of left field, I will continue to vote for the pace of reduction we have undertaken, reducing by $10 billion per meeting our purchases and eliminating them entirely at the October meeting with a final reduction of $15 billion,” Mr. Fisher said.
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