hr: Money

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As regards the ever increasing inflation rate, Federal Reserve Bank of Dallas President Richard Fisher expressed the opinion that the central bank should hike interest rates should commodity prices rise uncontrollably and badly affect consumer spending.

Thomas Hoenig of Kansas City and Gary Stern of Minneapolis are among the Federal bank presidents that have spoken up regarding their concern about price increases this month.

Of all the members of the Federal Open Market Committee, Fisher was the only one who expressed a contrary view and dissented thrice from decisions to cut the overnight bank-lending rate as he would rather have either the status quo (no change) or a much less drastic rate reduction.

“If inflationary developments and, more important, inflation expectations continue to worsen, I would expect a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic [economy]. I don’t know a single person on the committee that isn’t concerned about inflation. The question is, ‘what is the right treatment?’ That is subject to debate,” according to Fisher.