Dallas Federal Reserve President Richard Fisher said Monday that he "fully agreed" with Chairman Ben Bernanke's taper announcement last week.

In a speech in London and in comments to media following it, Fisher also said that he had not been surprised by the market reaction to Bernanke's comments.

"We would have had a market reaction no matter what we decided at the time," Fisher said.

"I don't think you can judge it based on a couple of days," he added. "We'll see how it settles down".

Only in the event of "enormous" and "destructive" financial instability would he be worried, Fisher continued. 

"What I personally would be worried about would be a significant spike - that would show a risk of financial instability". 

"Our job is not to satisfy the rich and quick," Fisher said, adding that he had warned the FOMC that the markets would test its resolve should they detect "weakness".

"Our job is to do what is right for the real economy," he continued, "not to satisfy the quick and the rich."

Noting that the sharpest moves had been in 7- and 10-year bonds, Fisher said that he was not uncomfortable with current yields in this area of the curve.

He also rejected ideas that the Fed might adjust down its 6.5% unemployment target given the currently low participation rate.

"The central bank has to be very careful not to shift things around - because we will be tested," Fisher said.

"To shift these numbers around would be bad form," he added.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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