Q&A: Dallas Fed’s Fisher Talks About His Role, the Economy and the Next Fed Chief

(The Dallas Morning News/MCT) —

As the hawkish and candid president of the Federal Reserve Bank of Dallas, Richard Fisher attracts attention.

That will only intensify as he takes on a more visible role next year at a crucial time for the nation’s central bank and the economy.

Fisher will become a voting member of the Federal Reserve’s 12-person policy-setting committee as the central bank’s leadership changes and it winds down its economic stimulus program. He was last a voting member in 2011.

Fisher became head of the Dallas Fed – one of 12 banks in the Federal Reserve system – in 2005, after spending seven years in Washington, D.C., as a top trade negotiator in the Clinton administration and working with former Secretary of State Henry Kissinger. He oversees about 1,300 employees and a district of 27 million people in Texas, northern Louisiana and southern New Mexico.

Fisher spoke with The Dallas Morning News earlier this month about his role at the Fed, the economy and Janet Yellen, the nominee to be the next Fed chief. This transcript was edited for clarity.

QUESTION: When you become a voting member of the Federal Open Market Committee, how will your role change?

ANSWER: Nothing will change … except for what I say. What I say now, and have for the last two years, has not been reported by the press. What changes is if I say yea or nay, it gets recorded. All 12 bank presidents get equal time at the table … but only the voters get recorded.

Q: Will that affect your frankness?

A: Never. My views are pretty well-known, and I expect my votes to reflect my views. I don’t pull any punches. What I try to do is to speak to the truth as I see it through the Dallas Fed’s eyes.

Q: What do you see as your responsibility as a voting FOMC member?

A: My responsibility is to speak to the truth as (former Fed Chairman) Alan Greenspan instructed me to do on my very first day. This is a recommendation Alan gave me because he did it and didn’t see others with the background to do it at the table – to provide the view of the business community, not economic theoreticians. Many of my colleagues are very respected, highly regarded economic theorists. I’m one of the exceptions. So I view my job as articulating what we see on the ground happening. I have my own personal survey I conduct.

Q: If Fed chairman nominee Janet Yellen is confirmed, how will your views mesh with hers?

A: They don’t. My views are different than Janet’s individual views as a governor. Janet is on the dovish side, and I’m on the hawkish side. No chairperson exerts their own views; they can shape the argument.

Q: Should the Fed be more transparent about its policy decisions?

A: I think we need to explain ourselves better, and I work very hard to do that. In a way, when we sit around the (Fed) table, we speak Latin. No American understands Latin. I think we need to explain ourselves better, and I work very hard to do that.

Q: Fed policy decisions have stirred and slammed stock markets. Do you think the Fed should be less concerned about the impact to financial markets?

A: I don’t believe we should be making policy based on what happens in the stock market. We should make policy based on what is good for the real economy of the United States. If the real economy is humming, the stock market will be just fine. It’s driving the global markets. Central bankers have become the key operators of the economy. That’s not our job. Because the fiscal authorities either here or in Europe are so dysfunctional, the central banks have become uber-focused on, and I think it puts us at risk.

Q: You are 64. Fed bank presidents must retire at 65, but those, like you, appointed after age 55 can – at the option of the board of directors – remain until 75 or until they reach 10 years of service. What are your plans?

A: My full intention is to step down on April 30, 2015. Ten years is a long time to do this job.

Q: What if you were asked to stay longer?

A: I’d have to think about it.

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