Federal Reserve Bank of Dallas President Richard Fisher said credit markets have contracted an STD - "securitization transmitted disease" - while speaking to an audience at the New York University Money Marketeers Club Thursday night.

Fisher said the Fed Funds Rate is a less reliable tool in this crisis and that a rate hike is less certain given the "imploding financial system."

He said that financial markets have been bleeding, and that while toxic assets must be isolated, this will not be enough to produce a recovery.

Fisher said he hopes the current crisis will force lawmakers to address the "vast fiscal chasm" in the United States.

By Megan Ainscow
©CEP News Ltd. 2008