Dallas Federal Reserve President Richard Fisher spoke with FOX Business Network’s (FBN) Maria Bartiromo during the debut of Opening Bell with Maria Bartiromo this morning. Fisher spoke about tapering, saying, “I am in favor of” tapering $10 billion per meeting and that “we have plenty of liquidity sitting on the sideline, gas tank is full and there is no need to keep adding to it.” Fisher went on to say, “I would have liked to not have done QE3 in the first place that was a committee decision.” Fisher said, “I am very happy with doing this in the measure of steps which Janet Yellen has spoken about recently and I am in full accord on that front.”
Excerpts from the report are below.
Richard Fisher On $10 billion taper per meeting:
“That is certainly what I am in favor of, you know, I can only speak for myself. We have plenty of liquidity sitting on the sideline, gas tank is full and there is no need to keep adding to it. I would have liked to not have done QE3 in the first place that was a committee decision. I am very happy again with the sign we are moving in the right direction and I am very happy with doing this in the measure of steps which Janet Yellen has spoken about recently and I am in full accord on that front.”
Richard Fisher On Federal Reserve Chair Janet Yellen:
“Well we are going to have our first meeting with her as chairperson and I think she will carry forward the good example set by Ben Bernanke, listening to everybody at the table whether we have votes or don’t have votes and very much trying to agree on a unanimous – if possible – decision on how we should proceed.”
On the minimum wage increase:
“An economist would tell you if you raise the price of something you might have a cut back in demand unless that demand surges, so from an economic standpoint that’s the perception. I hesitate to get involved in politics.”
On fiscal policy:
“Democrat or Republican, the Fed has done so much to make capital available and cheap, they should be thinking, both of them, at all times, how do we put the American people back to work? How do we incent businesses to take advantage of what the Federal Reserve has made possible to create real jobs, not just to encourage financial speculation? If they would just think that way, get rid of all the other issues and focus that way, jobs is the route to dignity for any American. Everybody wants to work. No one wants to be on the dole. So put the American people back to work. Take advantage of what the Fed has presented.”
MARIA BARTIROMO, FBN HOST: The U.S. economy hitting a slow patch to start the year and the latest reports indicate the harsh winter may be to blame.
Goldman Sachs Group Inc (NYSE:GS) says more than half of the slowdown can be attributed to the deep freeze. But my next guest does not think it should affect the Fed’s tapering plans at all. Dallas Federal Reserve president Richard fisher joins us right now in an exclusive.
Richard Fisher, always nice to have you on the program. Thank you so much for joining us, good to see you.
RICHARD FISHER, DALLAS FED PRESIDENT: Thank you, Maria, and I’ll tell you, I agree with Mario Gabelli completely, it’s an honor to be on your first show.
BARTIROMO: You’re so sweet. Thank you so much, Richard.
So let me talk to you a little about what’s going on in this economy. How does it feel to you? We had the 2008 transcripts out, as you know, over the weekend, which everybody has been poring over. How would you characterize where we are today?
FISHER: Well, I think for the sign, it’s positive and things are picking up and the attitude of business leaders I speak to is much more positive, encouraged by, of course, what’s happened in the equity markets and elsewhere. There’s a more positive tone and a less pessimistic thing than we were before.
We’re still not seeing employment being driven to the degree that we would like to see at the FOMC, but it’s definitely improved, Maria. We’ve recovered over 90 percent of the jobs lost in the Great Recession and we’re moving forward; I think that’s the important point.
BARTIROMO: So what do you think —
FISHER: Without inflationary pressure.
BARTIROMO: Yes, what do you think it’s going to take to start getting that employment really churning out some sustainable, strong job creation?
FISHER: A sensible, fiscal and regulatory policy. There’s so much monetary accommodation out there; money is still dirt cheap. There’s enormous amount of reserves sitting on the sidelines. They have to be incented to use this and the banks want to lend.
They have well over $2.75 trillion in reserves on their own balance sheets or with us at the Federal Reserve Banks. People have to be incented to put that stuff back to work and right now there’s no fiscal guidance although the tone is better. We don’t know what taxes are going to be, spending is going to be and everybody complains about regulatory overload.
So it’s up to the fiscal authorities now. I think the Fed has done plenty, if not too much.
BARTIROMO: Yes, listen, I think you’ve been singing this song for a while.
Do you think we are actually going to see fiscal stimulus, a change in tactics? Anything that we can get our arms around?
FISHER: I feel like Elton John, you’ve got to sing “Benny and the Jets” every single time you perform, and the message I hope will get through.
But here’s the point. You can’t count on the Federal Reserve to continue along this path. If anything, as you know, we’ve been tapering back. It’s up to the fiscal authorities. They need to grow up and make some serious decisions.
BARTIROMO: So tell me about the tapering, Richard, as much as you can. You were down to $65 billion in bond buying a month. Is this going to a consistent take it back $10 billion every meeting?
FISHER: Well, that is certainly what I’m in favor of. You know, Maria, I can only speak for myself.
We have plenty of liquidity sitting on the sidelines, the gas tank is full and there’s no need to keep adding to it. I would have liked not to have done QE3 in the first place, that was the committee decision.
I’m very happy again with the sign. We’re moving in the right direction and I’m very happy with doing this in the measured steps of which Janet Yellen has spoken about recently and I’m in full accord on that front.
BARTIROMO: How has the tone changed within the Fed with Janet Yellen now in the chairman’s seat?
FISHER: Well, we’re going to have our first meeting with her as chairperson and I think she will carry forward the good example set by Ben Bernanke, listening to everybody at the table, whether we have votes or we don’t have votes, and very much trying to agree on a unanimous if possible decision on how we should proceed.