WSJ reported that Fed governor Richard Fisher said interest rate raise is still a choice. It might well be lip service. And how can he say anything different?

The U.S. Federal Reserve is prepared to raise interest rates again if it appears that it hasn't done enough to curb inflation, Federal Reserve Bank of Dallas President Richard Fisher said Tuesday.

Answering questions following a speech on globalization at an investment seminar, Mr. Fisher said the current rate of inflation is "too high," but added that he expects inflation to ease due to the Fed's long credit-tightening campaign and moderating economic growth. "If it doesn't, we will take appropriate measures."

He also said he is "very comfortable" with where interest rates are. Mr. Fisher isn't currently a voting member of the Federal Open Market Committee, which sets Fed interest-rate policy.

Mr. Fisher said the U.S. housing market is clearly in a sharp slowdown. "There is no doubt we have seen a severe, sharp correction," he said. "The question is the duration."

However, he said with the exception of the housing market and the automobile industry, the U.S. economy is doing fine. "I would like to remind you the rest of the economy is firing on all pistons."