Fed Richard Fischer Says Blame Congress
Following last week's announcement of the start of QE3, (the next phase in the Fed's stimulus plan to improve unemployment), a top official of the Fed claims Congress is causing too much uncertainty for the plan to work.
In an interview with CNBC, Dallas Federal Reserve President Richard Fisher stated that the Federal Open Market Committee (FOMC) agreed that the economy has been in positive territory, but is still at risk because there is not enough growth to provide a certain amount of jobs.
"We're at stall speed, if we didn't do this … we'd keep ambling along," he said.
Fisher was adamant that he was not a supporter of the new quantitative easing and would have voted against it but he was a non-voter on the committee. However, he did say, "Let's give the chairman some credit here. He's doing what he wants to do, has to do, should be doing for the economy …a decision was taken, but instead of hammering the Federal Reserve, point your fingers at the congress."
Fisher went on, "The reason that we have so much uncertainty is not just uncertainty about Europe and uncertainty about slowdown in China. These are important things; the real uncertainty stems from what are my taxes going to be? What kind of spending patterns are going to come out of the federal government?"
According to Fisher, the FMOC has provided all the liquidity and tools essential to create the necessary relief on unemployment. However, the largest issue here is the uncertainty caused by the government.
With the dual mandate, the FMOC is struggling to produce the results warranted by its policies because the economy is lacking the incentive to utilize tools created by the FOMC. Fisher emphasizes, "I feel very strongly about this. Our job is not to provide Ritalin to the traders."
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