Fed policy makers Richard Fisher said on Monday that he and U.S. bond yields rise, the central bank's signal plan slowing its support is very comfortable, but warned that a large spike would be "devastating."
"I'm not uncomfortable, current rates," Fisher told reporters after a speech held OMFIF. "I do not think you can judge it on the basis of a few days, we already have such a market reaction, but we must wait and see how things settle."
Last week, Fed Chairman Ben Bernanke hinted the central bank may end its bond-buying program later this year from the beginning and end of 2014, the unemployment rate is likely to be around 7% in the middle.
His comments sent stocks fell and bond yields rose sharply as investors less stimulus from the Fed, although the pace of economic recovery is less than stellar.
"Personally, I would be worried about, is a significant spike (Treasury yields)," Fisher said. "This shows that the risk of financial instability, but gradually increased over time (do not worry about me)."
Fisher, who heads the Dallas Federal Reserve also said the central bank had to follow through with its signal, if things are broadly in line with the U.S. economy is expected to succeed.
"If the major carriers detected weaknesses, they will test it and if they pick up the lack of a solution, they will test it smells."
"Overall, we will be tested and we need to anticipate market reaction," Fisher said.
 



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