May 20 While the Federal Reserve's accommodative
policies have boosted stocks and helped the rich, it is unclear
whether they are doing enough for the broader U.S. economy, a
top central bank official said on Monday.
"We've made rich people richer...," Dallas Fed President
Richard Fisher said on CNBC television. "Question is what have
we done for working men and women in America?"
Fisher, who has long opposed the Fed's bond-buying program
and wants to reduce it, added he expects real gross domestic
product growth of more than 2.5 percent by year end.
The central bank is buying $45 billion in Treasury bonds and
$40 billion in mortgage bonds each month in an effort to
encourage investment, hiring and economic growth in part because
the unemployment rate remains high at 7.5 percent.
The benchmark S&P 500 stock index has risen some 16
percent since the so-called quantitative easing (QE) program was
launched in September, 2012.
Fisher's hawkish views have in the past few years been
largely ignored by Chairman Ben Bernanke and the majority of Fed
policymakers, but investors are now anxiously predicting when
the bond-buying will be reduced.
On Monday, Fisher warned that the Fed could be buying all of
the gross issuance of mortgage backed securities if it keeps up
the current pace. "We have to think about our fiduciary duty
long term," he said.
Noting there are other Fed officials who agree with him,
Fisher, who does not have a vote on policy this year,
highlighted comments last week by centrist San Francisco Fed
President John Williams who said the central bank could trim its
purchases this summer.
"I think the odds are in favor ... of dialing this back a
little bit or keeping it at its current pace," as opposed to
increasing the purchases, he said.
The Fed has a policy meeting set for June 18-19.
Asked who might succeed Bernanke when the chairman's term
expires early next year, Fisher said: "I personally would like
to see Ben stay. I think he is extraordinary and has progressed
enormously on the job."
Fed Vice Chair Janet Yellen "is extremely capable, there are
other capable people," he said. "I can tell you one thing for
certain: it won't be me."