May 09 2014

 

Rate Range Projection by Bank

 Next week 101.50- 102.50

 Next 3 months 100.00 - 105.00

 

Richard Fisher, the president of the Dallas Federal Reserve Bank, said Friday that he supports the central bank ending its bond- buying program in October with a final reduction of $15 billion. Fisher, who is a voting member of the Fed's policy committee this year, cautioned that the forecasts are little more than "best guesses" and that the composition of Fed voters has been in flux. Fisher made fun of the market's fixation on the "dot chart," the graphic that lays out forecasts of the Fed's benchmark interest rate by all members of the Fed's policy committee. There is a debate among economists about whether the Fed would decide to end the program in October or extend it until December. In a speech to community bankers in New Orleans, Fisher, a consistent critic of the program, said the central bank couldn't speed up the pace of the taper because markets are "somewhat addicted to our accommodation of their needs." The Fed has been reducing the pace of its asset purchases by $10 billion per meeting this year, which would leave a balance of $15 billion by the policy meeting in late October. It is not an arcane technicality because the central bank is not expected to even contemplate tightening until after the asset purchases have been completed. "Some analysts practically worship the dots. They have become analytical idols around which a doxology of sorts has developed," he said. "Surely economists of high repute are aware of the imperfections of this exercise...we, on the Fed policy committee, certainly are," he said