Outspoken Opponents

Fisher said in response to audience questions he wants to see the central bank’s balance sheet eventually returned to an all-Treasuries portfolio. While Fisher has been one of the most outspoken opponents to bond buying among Fed officials, he said in February he didn’t want to stop purchases “cold turkey,” which could destabilize the market.

“The housing market is on a self-sustaining path and does not need the same impetus we have been giving it,” Fisher said today to the National Association for Business Economics in Houston. With the success of continued buying “questionable,” he said, “I think we can rightly declare victory on the housing front and reel in -- or dial back -- our purchases, with the aim of eliminating them entirely as the year wears on.”

Fisher said he was encouraged by recent economic data and believes growth will probably exceed private economists’ forecasts of 2.4 percent this year. The housing market is on the rebound, banks are easing lending standards and state and local government cutbacks are no longer a major drag on growth, he said.

Downward Trend

The jobs report for April as well as a downward trend in initial claims for unemployment insurance may have signaled an improvement in the labor market as well, the Dallas Fed chief said. Employment picked up more than forecast in April, and the jobless rate unexpectedly declined to a four-year low of 7.5 percent, a Labor Department report showed on May 3. Revisions added a total of 114,000 jobs to the employment count in February and March.

More Americans than projected filed applications for unemployment benefits last week. Jobless claims jumped by 32,000 to 360,000 in the week ended May 11, exceeding all forecasts in a Bloomberg survey of economists and the most since the end of March, Labor Department figures showed today in Washington.

The yield on the 10-year Treasury note dropped six basis points, or 0.06 percentage point, to 1.88 percent at 12:12 p.m. in New York, according to Bloomberg Bond Trader prices. The Standard & Poor’s 500 Index was little changed at 1,658.20.

Unexpectedly Advanced

Sales at U.S. retailers unexpectedly advanced in April, Commerce Department figures showed this week. Fisher called the figures “a nice upside surprise.”