Dallas Fed President Is Worried About Insurance

Former Dallas Fed President Richard Fisher was a guest on CNBC's

segment on Wednesday to discuss the Federal Reserve's monetary policy and what sectors could be most impacted. According to Fisher, a low interest rate environment may pose a notable risk for insurance companies. In fact, he said that he is "most worried" about the sector as insurance companies derive income from safe investments such as Treasury bills. He alluded to the possibility that a persistently low interest rate environment may result in companies having insufficient funds to payout its customers. "Insurance companies, particularly life companies, are like noble oxen," Fisher said. "They pull the cart forward steadily forever and ever and ever. They're living in a 1 percent world in this country, but they're pulling a 3-to-6 percent liability cart." "It doesn't square," he added. Fisher further suggested that the Federal Reserve failed to anticipate how "easy money" would impact the broader financial sector. Finally, Fisher stated that the Federal Reserve should boost interest rates by one-quarter of a percent in June or July and then oversee a second interest rate hike at some point in the bottom half of the year.