* Fed should not do any more easing-Fisher
* Fed policy-setting panel meets next week
(Adds Fisher comments, background)
By Laurie Fox
DALLAS, June 13 The U.S. Federal Reserve must
reverse its super-easy monetary policy or risk fueling runaway
prices, a top Fed official known for his hawkish views on
inflation said on Monday.
"There's enormous liquidity in the system," said Dallas
Federal Reserve Bank President Richard Fisher, a voting member
this year of the Fed's policy-setting panel. "We need to
tighten policy or give rise to inflationary forces."
The Fed has kept interest rates near zero for two and a
half years, and has bought more than $2 trillion in long-term
securities to push borrowing costs still lower and help pull
the U.S. economy from its worst recession since the Great
With recent economic data falling short of expectations,
the Fed is not expected to start raising rates until late next
year, based on trading of short-term U.S. interest rate futures
at the Chicago Board of Trade.
Fisher did not say when he believes the Fed should start
removing accommodation, although several of his more hawkish
colleagues have called for tightening as soon as this year. The
Fed's policy setting panel meets next week.
Fisher repeated earlier comments that the U.S. central bank
has done its job and should not add any further stimulus.
On that view even the Fed's more dovish members concur,
saying the bar is very high for further bond-buying. The Fed is
set to complete a $600 billion round of Treasury buying this
month, and Fed Chairman Ben Bernanke last week gave no
suggestion he would call for further purchases.
Fisher repeated his view that it is up to Congress to keep
the recovery on track by clarifying the outlook for tax policy
and regulation. It also will help, he said, when growing demand
becomes more obvious.
"Our job is not to propel the economy all by ourselves. Our
job is to provide the fuel, but not to flood it, so as to
create inflation," Fisher said.
(Reporting by Laurie Fox in Dallas; Writing by Ann Saphir;
editing by Carol Bishopric)