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
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."