WASHINGTON (dpa-AFX) - 'Fiscal misfeasance' by Congressional lawmakers has prevented a more robust economy recovery from taking hold, a top official at the Federal Reserve said Wednesday.
Dallas Federal Reserve President Richard Fisher, one of three dissenting voters at the Fed's August recent rate-setting meeting, explained that the Federal Reserve has done enough to support the economy.
At the FOMC meeting, the committee announced that a weak economy will likely to warrant exceptionally low levels for the federal funds rate at least through mid-2013.
The pledge to keep rates near zero for the next two years was a change to the Fed's 'extended period pledge,' which was seen by the markets as a three to six month outlook.
In defending his dissenting vote, Fisher said that it was unwise to offer further accommodation when the financial system is already awash with cheap and abundant liquidity.
Fisher, a noted inflation hawk, refuted media reports that his dissenting vote was based on concerns about rising consumer prices.
Rather, he believes that 'those with the capacity to hire American workers....are immobilized' because 'they simply cannot budget or manage for the uncertainty of fiscal and regulatory policy.'
Fisher blasted lawmakers on Capitol Hill for compounding uncertainty during this summer's contentious debt ceiling negotiations.
'With the leadership of the nation -- Republicans and Democrats alike -- and every talking head in the media making clear hour after hour, day after day in the run-up to Aug. 2 that a financial disaster was lurking around the corner, it does not take much imagination to envision consumers deciding to forego or delay some discretionary expenditure they had planned,' he said.
Because Congress failed to clearly define impending changes in taxes, spending and subsidies, business decision makers were left 'frozen in the their tracks.'
Without clarity on how Congress will implement changes, it will be 'devilishly difficult for businesses to commit to adding significantly to their head count,' Fisher said. 'No amount of monetary accommodation can substitute for that needed clarity,'
'In fact, it can only make it worse if business comes to suspect that the central bank is laying the groundwork for eventually inflating our way out of our fiscal predicament rather than staying above the political fray-thus creating another tranche of uncertainty,' he added.
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