Fed's Fischer supports higher rates if markets overheat .

• Fed Vice Chairman Stanley Fischer feels that it might be necessary for the central bank to increase interest rates if financial markets were overheating, though the first line of defense should be using regulatory tools to prevent bubbles from developing.

• "If asset prices across the economy - that is, taking all financial markets into account -- are thought to be excessively high, raising the interest rate may be the appropriate step," Fischer said in a speech at the annual AEA meeting on Sunday.

• Also at the conference: San Francisco Fed President John Williams discussed estimates of long-run neutral rates, while Cleveland's Loretta Mester delivered her outlook for the U.S. economy. 

By:  Yoel Minkoff (SA News Editor).

Review: Emerging Market Formulations  & Research Unit, Flagship Records.
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