On balance, I believe we have been making progress toward our goals, recognizing that a few issues still cloud the outlook. Most noteworthy is the fact that inflation continues to run well below our 2 percent objective. With respect to the economic growth outlook, the softness in third-quarter real GDP – which according to its initial estimate rose at only a 1.5 percent annualized pace – and the weakness of the manufacturing sector have raised concerns that the U.S. economy may be losing some forward momentum. Sharp reductions in oil and gas drilling activity and a loss of international competitiveness associated with the dollar’s appreciation over the past year have restrained factory output. Judging from historical experience, the impact of the dollar’s recent strength has the potential to be protracted, so that the trade sector probably will continue to be a drag on growth in 2016. Thus, the manufacturing sector is likely to continue to lag behind the rest of economy. But these negatives need to be set against the many positive aspects of the economic outlook. In particular, domestic demand continues to grow at a solid pace as increases in consumer spending, housing and business fixed investment all contributed to the third quarter’s 2.9 percent annualized gain in real domestic final sales. A large decline in the pace of inventory accumulation was the main reason why real GDP growth faltered in the third quarter.
Richard W Fisher: Containing (or restraining) systemic risk – the need to not fail on “too big to fail” Remarks by Mr Richard W Fisher, President and Chief Executive Officer of the Federal Reserve Bank of Dallas, before the Market News International Seminar, New York, 6 June 2011. *  *  *  The views expressed by the author do not necessarily reflect official positions of the Federal Reserve System. Thank you for that kind introduction. This discerning audience no doubt noted that despite being overeducated, I am not a formally trained economist. I do not have a Ph.D. in economics; those who do will correctly deduce that I am somewhat “dismal” in comprehending the arcana of “the Dismal Science.” After my undergraduate education in economics and my studies at Oxford, I took a different path. I earned an MBA and then went to Wall Street and into funds management before cashing out and taking to public service. My perspective on monetary policy and regulation is shaped less by theory and more by my experience as a market operator. I confess that in matters of monetary policy and regulation, I am often in the minority. This does not make me the least bit uncomfortable. The majority opinion is not always right; indeed, my experience as an investor has biased me to conclude that more often than not, the consensus view is the wrong view, even among the most erudite.