8:45 *FED’S HOENIG IS `VERY CONCERNED’ ABOUT DEBT LEVELS IN U.S.
8:46 *FED’S HOENIG: HIGH PRIVATE DEBT PUTS PRESSURE TO KEEP RATES LOW
and just for good measure – the one to remind us of who he really (and still) is:
8:53 *HOENIG WANTS TO RETURN TO `NORMAL’ RATES `SOONER,’ NOT LATER
Given the amount of economic news along with Greek chatter all day long, we thought it might be helpful to throw on top of the pile, some voting FOMC h’lines from earlier on in the day, with a twist. This may be a first – an FOMC member talking about deficits – high and rising starting immediately – as a reason that might FORCE FOMC to keep rates LOW. Pelosi, you listening?? Barney? Harry? Anyone?? Bueller, Bueller … Bueller …
We first picked up on these comments from WSJ (LINK HERE) which summarized the interesting and salient point as follows:
Hoenig also said he was “very concerned” about the debt levels in the U.S. and the federal deficit.
“Depending on your assumptions about the economy, that federal debt will grow at an unsustainable level starting immediately, or in a very few years,” Hoenig said. “We do have significant private debt, so that’s in place, so what worries me about that [is] that puts pressure on the Fed to keep interest rates artificially low as you try to deal with that debt.”
In his own words (and C-Span, while good, doesn’t appear to make video embeddable OR we’re still weary from shovelling), voter, Hoenig – click on thumbnail for interview:
Thomas Hoenig, Federal Reserve Bank of Kansas City, Pres.
Thomas Hoenig explains his concerns with a proposal by Senate Chairman Christopher Dodd that would create a single regulator to oversee banks, a role currently administered by several bodies, including Federal Reserve regional banks. Mr. Hoenig says oversight within the current structure of regulators can work as long as clear standards of governance are set by Congress.
Washington, DC: 26 min