NEW YORK (Reuters) - The Federal Reserve risks "overkill" if it continues buying mortgage bonds at the current clip because the U.S. housing market is on sounder footing, a top U.S. Federal Reserve official said on Wednesday.
In a speech, Dallas Fed President Richard Fisher repeated his preference for the U.S. central bank to taper its $40 billion in purchases of monthly mortage-backed securities.
The Fed is also buying $45 billion in Treasury bonds per month as part of its unprecedented drive to spur investing and hiring, and to help along the slow and erratic U.S. recovery from the 2007-2009 recession.
Fisher, an outspoken inflation hawk whose views are in the minority among his fellow 18 Fed policymakers, pointed to a "reinvigorated housing market" as a source of concern over the extraordinary measures employed by the U.S. central bank that are known as quantitative easing.
"The fact that the housing-market gears have now begun to mesh is why I believe we are running the risk of overkill by continuing our mortgage-backed securities purchase program at the current pace, and would suggest tapering off those purchases," Fisher said in remarks prepared for delivery at Columbia University.
He added, however, that U.S. unemployment remains "annoyingly high" at 7.9 percent last month, and that private-sector job-creation has been less enthusiastic than desired.
(Reporting by Jonathan Spicer; Additional reporting by Ann Saphir in San Francisco; Editing by Leslie Adler)
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