Fisher Says Credit Markets May Not Force Fed to Act

Federal Reserve Bank of Dallas President Richard Fisher said investors shouldn't assume that rising credit costs will force the central bank to cut interest rates as deeply as it has already this year.

``We reacted with very deliberate actions that took place over a very short timeframe'' in January, Fisher said in an interview with Bloomberg Television in Paris. ``That shouldn't lead markets to expectations that we will continue to react in that manner.''

Fisher also damped speculation that the Fed is set to reduce its benchmark interest rate before policy makers' next scheduled session on March 18. Yesterday, yields on agency mortgage-backed securities rose to a 22-year high relative to U.S. Treasuries, while the cost to protect corporate bonds from default climbed to a record.

``I would discourage you from thinking that simply because of a significant action in the credit markets, like we had yesterday, that suddenly we're going to have an Open Market Committee meeting, and that suddenly we're going to move Fed funds rates in response,'' Fisher said. ``It doesn't work that way.''

http://www.bloomberg.com/apps/news?pid=20601087&sid=aDz8YduMC6bs&refer=home

 

He's badly mistaken.

 

See Fisher's balls shrink to the size of peas when WM, NCC or someone else reasonably big files for chapter 11. No more tough talk then.

 

Haha.

How right you are. If he was really serious, he would have resigned in protest long ago.

 

``I would discourage you from thinking that simply because of a significant action in the credit markets, like we had yesterday, that suddenly we're going to have an Open Market Committee meeting, and that suddenly we're going to move Fed funds rates in response,'' Fisher said. ``It doesn't work that way.''


This lying and deliberate misleading has to stop. Fed officials previously said they did not act in response to stock* market declines and then the Fed had an emergency conference on the day the SG news hit and cut 75BP the next day. THEY ARE JUST CONSTANTLY LYING. Anybody would think they have some other agenda than their stated one.

*for the benefit of the pimply flame kiddies I am aware that Fisher said credit markets and I said stock markets but I think the principle is the same.