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Is Richard Fisher Going Soft On QE3?

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The Dallas Fed president adds one hell of a caveat to when he thinks the FOMC should start slowing bond purchases (formerly thought to be the day before the earliest time possible), a program he previously accused of:

  • debasing the dollar;
  • having potentially "tragic" consequences;
  • "building up kindling for speculation and eventually, a massive shipboard fire of inflation;
  • and, of course, "the ruination of our economy and lifestyle."

“We should begin reducing bond purchases in September, as long as we don’t see a clear worsening of the economic data,” the president of the Federal Reserve Bank of Dallas told German business newspaper Handelsblatt.

Fisher's new (opportunistic) dovishness comes as his colleagues (most of them, anyway) seem to at last be coming around to his side. Although one of them is getting the hell out before she has to deal with the fallout that will result.

Federal Reserve Bank of Cleveland President Sandra Pianalto will retire in early 2014, the Cleveland Fed said on Thursday, signaling more change in the leadership of the U.S. central bank.

Pianalto has been president of the Cleveland Fed, one of 12 regional banks in the U.S. Federal Reserve system, since 2003….

"She's been a centrist and a team player; nobody would accuse her of being a showboater," said JP Morgan economist Michael Feroli. "Her public comments have never really made life difficult for Fed leadership, nor have they confused or misdirected the markets. Generally what she says has been a pretty reliable weathervane for where the committee is heading."

Fed's Fisher Says Bond Purchases Should Slow in September [WSJ Real Time Economics blog]
Cleveland Fed President Pianalto to retire in 2014 [Reuters]