FOMC should raise rates early and gradually, than late and steeply – Fed’s Fisher

FXStreet (Mumbai) - The US central bank must 'promptly' press ahead with an interest rate hike if it doesn't want to throw the nation back into recession, Dallas Federal Reserve (Fed) President Richard Fisher said late Monday in his final speech as a policymaker.

Key Quotes:

Delaying "lift-off" of the federal funds rate from the zero lower bound will risk "overshooting" full employment, necessitating "steeper" rate hikes later that could trigger another recession,

"The problem with overshooting full employment to any significant degree is that it has always set the stage for a new recession,"

"Every time the Fed has tightened policy after achieving full employment, it has driven the economy into recession."

"The idea that we can substitute a steeper future funds-rate path for an early liftoff seems risky to me,"

"I would rather the FOMC raise rates early and gradually, than late and steeply."