I had the great pleasure of hearing Stanley Fisher speak yesterday.  He is the Vice Chairman of the Federal Reserve System and has a compelling life story.  He was born into modest circumstances in Rhodesia, did his undergraduate work at the London School of Economics, his graduate work at M.I.T., taught at the University of Chicago, was chief economist of the World Bank and Governor of the Bank of Israel from 2005-2013, before being appointed by President Obama to the Fed Board.

He spoke with some optimism that inflation is starting to rise comfortably.  For those of us who recall the 70’s, that may sound ominous but is really much better than deflation.  The goal of the Fed is to have 2% inflation, and Dr. Fisher thinks it is in the 1.0 – 1.5% range.

He doesn’t see recession in the near term.  Of course, even if he did, he could not warn us.  He could only telegraph his worry.  I think he is relatively optimistic.

He sees two interest rate increases this year.  I think one is the most we’ll see.

He also discussed negative interest rates.  The media reported that he sees conflicting evidence on the effectiveness of negative interest rates.  What I heard was that the initial evidence shows it is effective in increasing growth in the five countries that are utilizing this economic tool, but he doesn’t know how effective it would be in our unique economy.  While no decision has been made, I feel he is leaning toward it.

If I had any criticism, I wish he had not read his speech.  He is too intelligent and too accomplished not to look his audience in the eyes.  Nonetheless, I’m thankful for the opportunity to hear him in person!