Balancing Inflation Concerns Against Financial Markets Volatility

Dallas Federal Reserve President Richard Fisher, who rotates onto the Federal Open Market Committee in January 2008, expressed concerns about whether the Federal Reserve Board's current and future interest rate decisions could lead to higher inflation.  Although he recognizes the serious concerns raised by turmoil in the financial markets, he sees the national economy as basically strong. 

The Dallas Morning News posted a story today, analyzing Fisher's remarks delivered in Amarillo, Texas, and comparing Fisher's viewpoint with that expressed by Federal Reserve Vice Chairman Donald Kohn, also delivered today, which suggests that we may see another interest rate reduction in response to conditions in the financial markets.

Link to Kohn speech:  http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm

Link to Dallas Morning News article:  http://www.dallasnews.com/sharedcontent/dws/dn/latestnews/stories/112907dnbusdallasfedinflation.ab5e0d.html

(ag) Nov. 28, 2007, in Economy