Dallas Federal Reserve President Not Concerned About Double Dip But Doesn't See Robust Growth Until Confidence is Restored
Fiscal authorities have done a "horrible job" and the current course of Federal Reserve monetary policy is "pushing on a string." Here he is on Fox Business today
NEW YORK --The current course of Federal Reserve monetary policy is "pushing on a string" and ineffective in the current climate of uncertainty, a top central banker argued Friday.
Speaking on Fox Business Network, Federal Reserve Bank of Dallas President Richard Fisher said the biggest factor holding back the economy is "uncertainty" created by government. As long as that climate of doubt continues stimulus provided by the Fed will be ineffective, he said.
That said, the central banker is worried about the economy. Growth is "anemic" and while "I am not concerned about a double dip [recession]...we are on an edge here," Fisher said. He said the nation's fiscal authorities "have done a horrible job" and things like the battle over the debt ceiling during the summer were "a horrible setback" for the nation's economy.
Fisher's comments came from an interview with the television news channel. The official is one of three central bankers who dissented at last week's Federal Open Market Committee meeting. Fisher, along with the leaders of the Philadelphia and Minneapolis Fed banks, believes the current challenges of the economy cannot be solved with additional policy support from the central bank.
Last week, the Fed decided that it would sell $400 billion of its short-dated holdings, and use the proceeds to buy longer-dated securities. Officials hope this action, called Operation Twist by market participants, will help make credit costs cheaper and give the economy more of a chance to grow (WSJ)