Posted on 11/19/2009 7:58:45 AM PST by SeekAndFind
HONG KONG/SINGAPORE (Reuters) - Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, underscoring that deflation is still a threat, especially with commercial real estate prices falling.
Dallas Fed President Richard Fisher said in an interview with Market News International that the weakening dollar, which hit a 15-month low against major currencies on Monday, is only one of the factors the Fed watches when setting policy.
"You pay attention to this," Fisher said in reply to a question about the effects of a weaker dollar.
"On the other hand, in terms of its inflationary input, unless it becomes disorderly, a depreciating dollar -- a gradually depreciating dollar -- doesn't necessarily add an enormous inflation impulse."
Fisher will become a voting member of the Fed's policy-setting committee in 2011.
The dollar has fallen 7 percent so far this year and likely has become a funding vehicle for bets on higher-yielding currencies in growing emerging markets.
Philadelphia Fed President Charles Plosser, answering journalists' questions after a speech in Singapore, was also not worried about dollar weakness.
"There's no particular reason you wouldn't expect the dollar to go back to where it was before the panic set in -- that is essentially all it has done at this point. I don't view that as anything particularly of concern," he said.
Plosser will also in 2011 become a voting member.
Fed Chairman Ben Bernanke in a speech on Monday startled investors by commenting directly on the dollar's value. He said the focus on the Fed's dual mandate of price stability and jobs growth will help the dollar to be "strong."
In the MNSI interview, Fisher acknowledged there are what he called "trade-offs" between the Fed's policy of keeping interest rates very low for an extended period and a strong dollar.
(Excerpt) Read more at reuters.com ...
You Lie !
And when the Dollar finally crashes, it will be Goldman Sax (and Co.) who will still make a profit and pay out handsome bonuses on the collapse of the World economy.
Independent Fed my butt they are working hand in hand with BO!
All the more reason to END THE FED!
This would be pretty funny but of course they will never allow it to happen
http://www.zerohedge.com/article/goldman-sachs-about-drag-down-federal-reserve
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