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Fed's Fisher: stronger dollar good for U.S. jobs

Published 01/30/2015, 02:09 PM
© Reuters. Richard Fisher, president of the Federal Reserve Bank of Dallas,speaks during at luncheon in Hong Kong
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By Ann Saphir

SAN FRANCISCO (Reuters) - Sharp gains in the U.S. dollar are good for the U.S. labor market, a top Federal Reserve official said on Friday, downplaying a crescendo of complaints from top executives over the dent to their profits.

"CEOs that have international operations complain about it," Dallas Fed President Richard Fisher told Reuters in an interview. "I hear from every one of them - it offsets their powerful earnings here domestically."

Fisher takes those complaints with a grain of salt.

"It brings to my mind the vision of Edward Munch's painting 'The Scream'," he said, adding, "It's not the end of the world."

Fisher, who plans to retire from his post in March, holds views that are often far from those at the Fed's core. Still, the former hedge-fund manager says he feels his views are heard at the policy-setting table.

"The more income and investment flows we get, the better it is for our companies big and small to go out and hire American workers," Fisher said. "And it does help on the consumption side, if, for example, oil is denominated in dollars, it just helps us have cheaper goods."

While a stronger dollar does hurt net exports, he said, it puts less of a damper on U.S. job creation than it may have in the past because the U.S. economy has become less export driven.

The U.S. dollar index (DXY) has advanced for seven straight months through the end of January, marking the longest streak of gains since the greenback was floated as a fiat currency in 1971.

Fisher spoke just two days after the U.S. central bank signaled it remains on track with its plans to raise interest rates this year.

"The statement makes it clear that at some point, we are getting closer, we've reached the tipping point. The tipping point is rates will go up, the question is when," he said.

Fisher has long called for the Fed to start tightening sooner rather than later.

© Reuters. Richard Fisher, president of the Federal Reserve Bank of Dallas,speaks during at luncheon in Hong Kong

But, he said, he is "resigned" to the fact that his view is in the minority at the Fed, and told Reuters he would not have dissented if he had a vote at this week's policy-setting meeting.

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