Fed's Fisher Sees Fiscal Drag, Economy Expanding in 2013
“I don’t believe any amount of monetary stimulus is going to deal with this uncertainty and inability of companies to budget, to plan” due to the lack of clarity in fiscal policy, Fisher said today in an interview on CNBC. He said he doesn’t see a “high likelihood” of a recession next year.
The Dallas Fed chief in 2011 dissented twice against moves to push down long-term rates and to keep the benchmark U.S. interest rate near zero until at least mid-2013. He voted five times in 2008 in favor of tighter policy. This year he isn’t a voting member of the Federal Open Market Committee, which is scheduled to meet Sept. 12-13.
Fisher, 63, said what is needed is regulatory clarity and fiscal policy certainty from Congress. Businesses are in a “defensive crouch,” he said.
The Fed on Aug. 1 said it will “closely monitor” economic data and financial developments and provide more stimulus if needed. The central bank also said it will continue swapping $667 billion of short-term debt with longer-term securities to lengthen the average maturity of its holdings, an action dubbed Operation Twist.
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