Sept 18 The Federal Reserve's aggressive stimulus program to tackle unemployment will probably be less effective because other factors were standing in the way of job creation, a top Fed official said on Tuesday.
The Fed announced last week that it would inject $40 billion into the economy each month through purchases of mortgage-linked debt, until it saw a sustained upturn in the weak jobs market.
Dallas Fed President Richard Fisher told CNBC that while he understood the logic behind the third round of bond purchases, or quantitative easing, he was doubtful it would work.
"I would argue that it is less impactful right now because you have other things inhibiting businesses from making decisions on capex and employment," Dallas Fed President Richard Fisher told CNBC.
"I would like to see people going out and build and commit to capex that's job creating in the United States and have some more immediate effect. I don't think this program will have much efficacy."
Fisher, a non-voter on the Fed's policy-setting committee this year, said had he been a voter, he would not have sided in favor of the third round of bond purchases.
Still, he said Chairman Ben Bernanke should be given credit for doing what he believed was right for the economy, adding that policymakers did not want to add more to uncertainty.
Alluding to the looming "fiscal cliff", the $500 billion or so in expiring tax cuts and government spending reductions scheduled to take hold at the start of next year, Fisher said monetary policy alone could not solve the economy's ills.
"We do our level best to get it right. We cannot do it alone and if it gets to the point where we are expected to do it alone ... we get into a very difficult spot from which we cannot exit," he said.
"So it's up to your views and everybody else, they own the Congress, they vote for them. Get your act together Congress."