Kansas City Fedhead Hoenig: Fed Rates Are Not Your B*tch, B*tch

Consider yourselves forewarned. The Treasury already got cussed out by Fisher and told that the Fed wouldn't bend over to fund their endless adventures. Anyone who has gotten used to ZIRP should start tapering off. I agree and am sick of hearing about my grandma's pathetic rate on her CDs while Goldman Sachs is building a new palace to celebrate their awesomeness for all to see. Fuck that.


The U.S. central bank must resist popular pressure to keep interest rates too low as the economy recovers, according to a top Federal Reserve official.

Kansas City Federal Reserve President Thomas Hoenig, in remarks at a private meeting last month that were released on Saturday, also said that top U.S. banks were still too highly leveraged, and would evade demands to raise more capital.

"As we become more confident that we are at the bottom of the recession and are moving into recovery, we must become more resolute in systematically reducing our balance sheet and raising interest rates," Hoenig told the annual meeting of the Kansas Bankers Association on August 6.

The Fed has cut interest rates to almost zero and doubled its balance sheet to around $2 trillion to keep credit markets from seizing in panic after investment bank Lehman Brothers failed last September amid massive losses on mortgage debt.

"Moving from zero to one percent, for example, is not a tight policy. I don't know what the neutral rate is, but I am certain it isn't zero," Hoenig said.

"Neutral" refers to a level of interest rates that neither stimulates nor hinders growth. The Fed reiterated at its August 12 policy meeting that the weak economy would warrant exceptionally low interest rates for an extended period.

Hoenig, who is regarded as one of the Fed's most hawkish, or anti-inflation officials, will be a voting member of its policy-setting committee next year.
Moving into position for exciting 2010, I see.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.