The Fed's Fisher Sees a 'Frightful Storm' Approaching

Fisher makes this prediction while the rest of the Fed and Treasury are sponsoring 'Take Your Family and Your Life Savings to the Beach" events. What is this, Jaws IV: the Fed Feeds Your Kids to the Shark to Give the Banks More Time to Do Some WaterSkiing?

Fed's Fisher sees 'frightful storm' brewing
By Alex Peacocke
May 29, 2008
Investment News

Dallas Federal Reserve Bank President Richard Fisher yesterday predicted a grim economic outlook for the United States and indicated that the Federal Reserve Board may be considering a change in monetary policy.

In remarks made to the Commonwealth Club of California in San Francisco last night, Mr. Fisher, a voting member of the Fed’s open market committee, predicted a “frightful storm” ahead for the U.S. economy.

He said that he expects “a change of course in monetary policy to occur sooner rather than later, even in the face of an anemic economic scenario,” if inflation expectations and developments continued to worsen.

Recent increases in commodity prices already have investors concerned about swelling inflation, which Mr. Fisher described as “the most insidious enemy of capitalism.” (I thought that the Fed and the Bush Administration were the top contenders for the title - Jesse)

The Fed has already cut its funds rate three times this year, to 2%. Mr. Fisher’s predicted change in policy presumably would indicate a hike in interest rates at the next FOMC meeting, which is scheduled for June 24-25. (Oh yeah that will be great for the housing market and the economy, unless its one of those 'fake' increases that is only on paper while the Fed and Treasury keep shoveling out liquidity to the banks to play with. - Jesse)