Federal Reserve Bank of Dallas president Richard Fisher warned Monday that the Fed’s expansionary monetary policies are fueling speculative activity in financial markets.

Though he is known as one of the more hawkish voting members of the policymaking Federal Open Market Committee, Fisher did not call for near-term monetary tightening in an exclusive interview with Market News International.

He said the FOMC must see how the economy evolves before deciding when to raise rates or shrink the Fed’s balance sheet, and must not “overreact” to inflation.

Fisher pledged to “get out in front” when the time is right to start shrinking the central bank’s bloated, and still expanding, balance sheet.

However, he evinced no urgency to tighten policy either through cutting the balance sheet or through short-term interest rate hikes.

But Fisher said it is vital that people not lose confidence in the Fed’s “resolve” to keep inflation from getting out of control.

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