Dallas Federal Reserve Bank president Richard Fisher Friday warned that the Fed must be careful to avoid giving the impression in coming months that it is “monetizing” what are expected to be heavy issues of Treasury debt to finance the exploding federal budget deficit.
Fisher said deflation risks appear to have been “beaten back” and said the outlook for inflation is “meek” so long as unemployment and other measures of resource slack are so large. But he added the Fed must be careful in its conduct of monetary policy to avoid inflation in the future.
— Market News International
