Dallas F_E_D's Fisher and the F_O_M_C Minutes

The biggest hawk at the F_E_D, the one who has resisted QE, thought it was a terrible idea, dissented time and time again was interestingly on CNBC this morning and had some interesting thigs to say. Here are some excerpts...(some are paraphrased)

"Bernie's main concern is efficacy of policy" meaning "Is it working". Then time and again through the interview he said the F_E_D is just doing the job that Congress won't do, that it hasn't helped the average American. 

He talked about the debate of the "Cost / Benefit analysis" as former F_E_D Governor Kevin Warsh pointed out, "getting in to accommodative policy is the easy part, exiting is the nightmare"-in other words, as I pointed out months ago when Warsh said this, at some point every dollar spent buying assets is going to cause 2-3x the problem in exiting, as Fisher makes clear, QE hasn't done what it was expected to do-but his tone was not as hawkish as he usually is, it sounded more conciliatory toward Bernie as if he was finally winning the argument.

He said, "We have to ask, is it working and the answer... Question mark". Then followed up saying, "We flooded the market with liquidity, but the boats are still tied to the dock" so the question he asks just before is more rhetorical as he says, it is not working, the boats are still tied to the dock.

Fisher also said "Monetary policy can't do it alone, Congress has to act" and he hinted they aren't doing their part, then later in the interview he says, "It would be REMARKABLE if Congress got its act together". So he continually makes these luke warm statements  that are almost un-oppinionated and whether purposefully or not, later chimes in with a strong opinion.

He admitted the F_E_D hasn't seen "The robust job creation they'd like to see".

He saws off the cuff to the interviewer, "The market isn't going to keep going this direction forever, you and I both know that". Which is a given of course, why mention it? He adds that QE stopped cold turkey "Would be too violent for the market".

What I find most interesting is the timing of the interview and who they chose to give it, the biggest hawk. With the F_E_D minutes coming out at 2 p.m. Wednesday from the last meeting in which the F_E_D gave an ambiguous, "We might buy more, we might buy less" and had no press Q&A after...

It seems to me Fisher was put out there to do some early damage control BEFORE the F_E_D minutes come out, which recently have almost been much more hawkish than the policy statement which was one of the strangest in recent memory, but as I mentioned, it seemed like the next logical step... From hinting to kind of saying, to throwing it up in the air completely. This is a 180 degree turn from a year ago when the F_E_D would never say anything other than, "We have more tools and stand ready to use them if need be".

These F_O_M_C minutes are probably going to be one of the biggest bombshells since late 2008 when the F_)E_D started easing.