On Tuesday, January 5th, former Dallas Federal Reserve President Richard Fisher appeared on CNBC, and the admissions he made were both refreshing and shocking. Fisher’s candor was the best CNBC footage since Jim Cramer’s 2007 on-air meltdown. Fisher admitted that the artificial gains in the stock market can be attributed to quantitative easing and 0% interest rates. “We frontloaded a tremendous market rally,” Fisher said proudly. This was a rare piece of truth coming from a former member of an organization that typically lies with impunity.
Fisher’s statements left his CNBC interviewers surprised, especially his comments about the “overpriced” stock market. Fisher tried to defend himself saying he didn’t vote for QE3, but that’s like Rob Schneider saying he didn’t make a third Deuce Bigalow movie. As anyone who has seen Male/European Gigolo can attest, the damage had already been done. Like Bernanke, Fisher rode off into the sunset and will not be blamed for the economic devastation that lies ahead. He now works for Barclays, and he serves on the boards of PepsiCo and AT&T.
The main takeaway from Richard Fisher’s ten year term with the Fed is that even he could not resist the temptation to tinker with the U.S. monetary system. In February 2015, Steve Matthews wrote, “As an interest-rate setter, Fisher has been an überhawk, the kind of policymaker who worries about inflation and asset-price bubbles even when neither is evident. That concern guided his consistent calls—and dissents at the Federal Open Market Committee—for a withdrawal of Fed stimulus as soon as possible.” It’s sad when even the ‘überhawk’ thinks QE is perfectly fine.
I covered the Fisher interview, along with many other topics, in episode 37 of Kennedy Financial, so please check it out if you would like to learn more.