WASHINGTON — Dallas Federal Reserve Bank President Richard Fisher said Tuesday the fiscal chaos in Washington would make it hard for him to argue for a taper at the Fed's next policymaking committee meeting at the end of the month.
"If there's still this chaos in the marketplace, and a lack of resolution, I personally can't see arguing to touch that mechanism right now," Fisher said in an interview with CNBC.
"At this next meeting, it'd be hard for me to make the case," said Fisher
who had argued for the Fed to pull back on its $85 billion in asset purchases at the September meeting of the Federal Open Market Committee.
Fisher does not currently vote on the Fed's policymaking committee this year, but will become a voter in 2014. Asked if this delay meant tapering would begin until 2014, Fisher said it was too early to say.
The ongoing fiscal chaos - including the government shutdown and fights over spending and raising the debt ceiling - "does throw a big wrench in the works here, of what would otherwise be an eventual normalization of monetary policy."
Still, Fisher reiterated his concern about the effectiveness of continuing quantitative easing.
"The wealth effect that we helped create ... has benefited a few. It hasn't been pervasive," he said, adding that his concern is how effective the program has been for "the working class of America."
Fisher blamed Washington for hampering the Fed's efforts to achieve its dual mandate of stable prices and maximum employment.
"If we have financial chaos, we can't achieve either of them," he said. "So, of course, we have to use whatever tools are made available to us to make sure we maintain financial stability, but the underlying cause of the instability - and the kind of motion we've seen, for example, in the Treasury markets the last couple of hours and last couple of days - we're not the cause of this."
He added: "We do have the credibility, but this is the problem: We're the only ones with credibility."
Fisher also warned the central bank cannot be solely responsible for restoring the U.S. credibility in financial markets.
"If we lose our credibility, you can't just count on the Fed alone, the central bank alone, to maintain it," he said. "With each step we take of buying one more security, we're getting closer and closer to some kind of position where we just can't go any further."
The Fed "will work to maintain stability, and prevent financial disorder. We have the capacity to do that."
Fisher also said he does not expect a big change when Janet Yellen takes over as Fed chair when Ben Bernanke steps down in January, once the Senate confirms her nomination.
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