Fed's Fisher: Lots of liquidity in economy

WASHINGTON Tue Jun 7, 2011 9:22am EDT

Richard W. Fisher, President and Chief Executive Officer for the Federal Reserve Bank of Dallas, speaks on International Economics at the Council on Foreign Relations in New York, March 3, 2010. REUTERS/Shannon Stapleton

Richard W. Fisher, President and Chief Executive Officer for the Federal Reserve Bank of Dallas, speaks on International Economics at the Council on Foreign Relations in New York, March 3, 2010.

Credit: Reuters/Shannon Stapleton

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WASHINGTON (Reuters) - Dallas Federal Reserve President Richard Fisher said on Tuesday there was ample liquidity in the U.S. financial system and no need for the U.S. central bank to continue its extremely easy monetary policy.

Interviewed on CNBC television, Fisher said U.S. businesses' balance sheets were in good shape and companies were awaiting clearer signs about how the economy will develop before they kick up the pace of hiring.

"This is going to be a very slow process, and right now we need to get the fiscal side" lined up, Fisher said.

Fisher, a voting member of the Fed's rate-setting Federal Open Market Committee, already is on record saying the central bank should not continue a bond-buying program. Its $600 billion second round of quantitative easing, known as QE2, ends this month.

"What would more liquidity do? It's not being used. It's sitting on the sidelines. The gas tanks are full," he said.

Fisher said he expects economic growth to accelerate in the second half of this year to an annual rate of about 3 percent to 4 percent and said businesses were poised to hire.

"We are lean and mean, our balance sheets are in great shape in America," he said. "There is a lot of liquidity out there. I am eager to see the trigger -- I don't know what it is -- for that money to be spent putting Americans back to work."

(Reporting by Glenn Somerville, editing by Jeffrey Benkoe)

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