Fed’s Fisher: Fed’s actions brought economy back from edge of abyss, prevented economic depression

Dallas Fed President Richard Fisher feels the US economy was pulled back from the edge of an abyss by aggressive policy actions undertaken by the Federal Reserve. The official feels the actions could be setting up a recovery, albeit a very slow one at first.

Fisher feels final Q-1 GDP likely to fall by between 5 and 6 percent, and would be surprised to see the US economy return to growth before dawn of 2010.

Short term inflation pressure is meek, while deflation pressures are beaten back. Fisher can’t see inflation taking hold while output gap very wide, but warns that the Fed needs to remain vigilant regarding longer term inflation and must stand prepared to reverse recent policy initiatives.