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Inflation Will Fall To 2%: Dallas Fed President Richard Fisher

Monday, 3 Oct 2011 | 9:42 AM ET

U.S. inflation will drop towards 2 percent, Richard Fisher, Dallas Federal Reserve Bank president, told CNBC Monday.

Richard W. Fisher, president of the Federal Bank of Dallas
Jean Ayissi | AFP | Getty Images
Richard W. Fisher, president of the Federal Bank of Dallas

Fisher said this downward trend meant he was unconcerned about price stability at present.

The headline Consumer Price Index , which includes food and energy prices, is currently at 3.8 percent on an annualized basis. The core CPI, which excludes the two volatile categories, is right at 2 percent.

The Fed president said growth for the remainder of the year would probably be “positive but anemic,” at less than two percent. However, “we could slip,” he warned.

Nonetheless, Fisher said he was opposed to a further round of quantitative easingat this point. He said: “The more we do [in terms of monetary intervention], the more the risk of creating more uncertainty.”

He added: “Liquidity is abundant and cheap. It needs to be put to work. Whatever we do has to have a complementary side, a fiscal policy that channels it properly.”

Dallas Fed President: Economy & Jobs
Everyone wants the same result, which is to rekindle employment growth, says Richard Fisher, Dallas Fed president, who says, at this point the nation needs to find the means to do so. Fisher adds that the Federal Reserve simply adds the fuel but politicians ultimately are the ones who have to execute to spur economic growth.

The Fed is just starting its recently announced Operation Twist program, in which it will swap $400 billion worth of short-term government debt for longer-dated issues.

The program is aimed at driving down longer-term borrowing costs in order to spur economic growth. However, some on Wall Street were hoping the central bank would embark on another round of asset purchases, known as quantitative easing.

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