They are a bit of an odd couple: the former money manager who has fought for years against the US Federal Reserve’s ultra-easy monetary policies on the one hand, and the disciplined economist who has backed those policies every step of the way on the other.
But Dallas Federal Reserve Bank president Richard Fisher and Federal Reserve vice-chairwoman Janet Yellen have a long-standing friendship that Fisher reaffirms with a kiss before each central bank policy-setting meeting and an occasional shared bite to eat.
“She’s been very dovish, and I am uber-hawkish, and I expect that we will disagree going forward,” Fisher said a few hours after the White House said Yellen would on Wednesday be nominated to succeed the Fed’s current chairman, Ben Bernanke.
“We disagree on policy, but she’s a good egg,” Fisher said. “I’m happy for her. I think it’s a good thing for the Federal Reserve.”
Fisher, a tall Texan, and the diminutive Yellen from California stand at opposite ends of the policy spectrum.
Yellen is seen as a monetary policy dove whose biggest concern is fighting high unemployment. Fisher is a self-proclaimed policy hawk, whose overriding focus is on fighting inflation.
Fisher warns regularly about the potential for the Fed’s current policies to stoke future inflation, and says they do not work very well to boost jobs anyway.
Yellen has said that in times of high unemployment, improving the labour market should take centre stage even at the risk of some inflation.
Fisher rarely if ever pulls his punches. Last month he criticised President Barack Obama for “mishandling” the process of picking the next Fed chairperson, and earlier this week likened bickering US politicians to “the three stooges”, a reference to a popular slapstick comedy act.
But on Tuesday, Fisher was all praise for Obama’s choice to head the Fed’s policy-setting table.
“My affection for her is deep and great… she is honest, disciplined, thoughtful… a true intellectual,” he said. Yellen “will have the opportunity to change the course of monetary policy at the appropriate time. If there’s anyone who has the capacity to do that intellectually, it’s Janet.”
There was one downside, Fisher said, to Yellen’s elevation to Fed chairmanship. They will no longer be able to exchange their customary kiss before each meeting. “It’s an exalted position,” he said. “There’s a protocol.” – Ann Saphir in Berkeley, California from Reuters