Richard Fisher, president of the Dallas Fed, has made a speech today which sets out where he stands on the question of further monetary easing. Mr Fisher will be a voting member of the FOMC next year.
A few quotes:
On the price front, I am known as an inflation hawk. I am comfortable with that description.
But it is clear that inflation is not the immediate problem facing the nation. As pointed out by the chairman, inflation has declined to a level that is at the low end of the 1.5 to 2 percent range that the participants in FOMC deliberations consider conducive for healthy economic growth over the long run.
The tide is perhaps turning. Eurozone mortgage interest rates have begun to rise, according to data just released from the European Central Bank.
The steady fall in the cost of borrowing for house purchases has been one of the less remarked upon economic trends of the past two years. But it has undoubtedly helped the eurozone’s economic recovery. Even in Germany – which avoided the property booms of the past decade – there are signs of the housing market picking up. With ten year fixed-rate mortgages available for less than 4 per cent, it makes sense to buy a house (especially if you are one of those Germans who fear galloping inflation is just around the corner). The pick-up has been even more pronounced in Paris. Read more