DALLAS — The Dallas Federal Reserve Bank has hired a search firm to find a replacement for President Richard Fisher, who plans to step down in March after a decade on the job.
"We intend to consider a broad and diverse group of candidates from inside and outside of the Federal Reserve System," Dallas Fed Chairman Mike Ullman said in a prepared statement.
Fisher's departure will coincide with that of Charles Plosser, who announced in September that would retire as President of the Philadelphia Federal Reserve Bank.
Fisher and Plosser have both been critics of the Fed's quantitative easing policy. Fisher often cited Texas' business-oriented policies as a model for federal government. Along with the Lone Star State, Fisher's district includes southern New Mexico and northern Louisiana.
Earlier this month, Fisher said he is concerned about the liquidity in the system, since "there is a lot of inflationary tinder available should the Fed mismanage its exit from the hyper-accommodative policy we have pursued and augmented with QE3."
Investment-grade companies are stronger, Fisher said, but there is also "what I consider to be a manifestation of an indiscriminate reach for yield, a revival of covenant-free lending, and an explosion of collateralized loan obligations (CLOs), pathologies that have proved harbingers of eventual financial turbulence."
Subpar credits' yields and their spreads to investment-grades have been affected by QE3, he said.
"Some 40% of newly issued CCC credits have negative cash flows. And yet 'junk' bonds have been trading at or near record historic low yields both in absolute terms and as measured by spreads over investment-grade credits. I worry about this as a risk that has been propagated by QE3, though I do not believe it is the Fed's job to rescue reckless investors from the errors of their ways."
Fisher, 65, was a U.S. trade representative before taking on the Fed role in April 2005. He had previously announced that he would retire by April 30.
The Dallas reserve bank said it hired the executive search firm Heidrick & Struggles International Inc. to conduct a search for Fisher's replacement.
