WHEN: Today, Wednesday, November 18th
WHERE: CNBC's "Squawk Box"
Following are excerpts from the unofficial transcript of a CNBC interview with Federal Reserve Bank of Richmond President Jeffrey Lacker on CNBC's "Squawk Box" (M-F, 6AM-9AM ET) today. Following are links to the interview on CNBC.com: http://video.cnbc.com/gallery/?video=3000455811 and http://video.cnbc.com/gallery/?video=3000455812.
All references must be sourced to CNBC.
LACKER ON THE AUDIT PROVISION:
THE AUDIT PROVISION, IS SOMETHING THATS SPOKEN OUT AGAINST BEFORE. IT SETS UP A MECHANISM WHEREBY INDIVIDUAL CONGRESS PERSONS CAN ASK FOR AN AUDIT IMMEDIATELY AFTER A FOMC MEETING AND GO OVER ALL OUR RECORDS AND TRANSCRIPTS OF THE MEETING. IVE CHARACTERIZED IT AS A MECHANISM FOR HIGH FREQUENCY HARASSMENT. I DONT THINK ITS CONSISTENT WITH THE BALANCE WE HAD IN OUR COUNTRY OF INSULATION AND AROUND THE WORLD OF INSULATION FROM SHORT-TERM POLITICAL DYNAMICS OF THE CENTRAL BANK AND MONETARY POLICY-MAKING.
LACKER ON KEEPING HIS FINGERS CROSSED:
WE HAVE BEEN THROUGH EPISODES LIKE THIS BEFORE IN WHICH SOME DISRUPTION OF CERTAIN GEOPOLITICAL OR MILITARY NATURE AFFECTS THINGS AND YOU KNOW FOR A TIME PEOPLE CAN GET CAUTIOUS AND PULL BACK A LITTLE BIT. THESE TEND TO BE TRANSITORY SO KEEPING OUR FINGERS CROSSED AND WAITING AND SEEING.
LACKER ON CONSUMER SPENDING:
I'M STILL WHERE I WAS IN OCTOBER AND SEPTEMBER. I THINK CONSUMER SPENDING GROWTH HAS BEEN EXCEPTIONALLY STRONG. WE SAW THAT NUMBER FOR THE THIRD QUARTER. ITS BEEN 3% OVER 3% FOR TWO YEARS NOW. THAT COMPARES TO NUMBERS UNDER 2% WE WERE GETTING FOR EARLY IN THE RECOVERY. SO THAT TO MY MIND IS A PRETTY IMPORTANT FACTOR.
LACKER ON OVERREACTING:
I THINK WE WAITED QUITE A WHILE. I THINK THE LESSON FROM AUGUST IS- I DISSENTED THEN. I THOUGHT YES, THERE WERE SOME POTENTIAL CONCERNS THAT YOU MIGHT HAVE FOR DOWNSIDE RISK GOING TO GLOBAL ECONOMIC DEVELOPMENTS. BUT WE'VE OVERREACTED TO THOSE IN THE PAST. I DIDNT SEE AN IMMEDIATE CONNECTION ECONOMIC FUNDAMENTALS IN THE UNITED STATES. I THINK THAT ASSESSMENT HAS BEEN BORNE OUT.
LACKER ON NOT SEEING A BUBBLE:
I DONT SEE ANYTHING I CALL A BUBBLE AND THE PEOPLE SAID WORD IS SOMETHING OBVIOUSLY GOING TO GO DOWN REAL SOON. SO FAR, THE THING SEEMED PRETTY MANAGEABLE. SO, I DONT SEE SOMETHING THAT'S SO OUT OF WHACK. M+A ACTIVITY THATS LIKE A SWAMP OF FINANCIAL ASSETS. SO ITS AN IMPLICATION FOR A REAL ECONOMIC ACTIVITY, SPENDING BY CONSUMERS, REAL CAPITAL INVESTMENT BY BUSINESSES.
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