10 Mar 2015
Fisher: Raising rates after full employment will trigger US recession – BTMU
FXStreet (Barcelona) - Lee Hardman, Currency Analyst at Bank of Tokyo-Mitsubishi UFJ, shares the key points of Dallas Fed President Fisher’s speech, noting that he believes that beginning the rate hike cycle post reaching full employment will only trigger a recession in the US economy.
Key Quotes
“The US dollar has derived some support overnight from comments from outgoing Dallas Fed President Fisher who stated in his final speech that the Fed should raise rates soon before the economy reaches full employment to avoid triggering a recession.”
“He expects that unemployment is likely to reach the bottom of the range of natural-rate estimates by the summer warning that “every time the Fed has tightened policy after achieving full employment it has driven the economy into recession.”
“He favours earlier and more gradual Fed tightening over later and more quickly.”
“Dallas Fed President Fisher retires on the 19th March and doesn’t plan to attend the 17th-18th March FOMC meeting.”
Key Quotes
“The US dollar has derived some support overnight from comments from outgoing Dallas Fed President Fisher who stated in his final speech that the Fed should raise rates soon before the economy reaches full employment to avoid triggering a recession.”
“He expects that unemployment is likely to reach the bottom of the range of natural-rate estimates by the summer warning that “every time the Fed has tightened policy after achieving full employment it has driven the economy into recession.”
“He favours earlier and more gradual Fed tightening over later and more quickly.”
“Dallas Fed President Fisher retires on the 19th March and doesn’t plan to attend the 17th-18th March FOMC meeting.”