BALTIMORE — Richmond Federal Reserve Bank President Jeffrey Lacker Friday warned that there is only so much the central bank can do to boost an economic recovery that continues to be buffeted by factors outside of monetary policy's control.

In remarks prepared for an economic education conference, Lacker focused his comments mostly on the need to build up skills and encourage more financial literacy. He did not discuss the economy or current monetary policy.

At the top of his remarks, however, Lacker did note that "as we've seen during the recovery from the Great Recession, there are significant limits to the power of monetary policy to affect the real economy."

The Fed's policymaking Federal Open Market Committee is currently buying $85 billion a month in U.S. Treasury securities and mortgage bonds to spur faster growth and improve labor market conditions in the near term, an action Lacker that vehemently opposes.

He does not hold a voting position on the FOMC this year.

But likely with the ongoing government shutdown, the drawn-out debate over raising the debt ceiling, and stubbornly-high unemployment rate in mind, Lacker argued that, "Federal Reserve policy actions cannot necessarily counteract the effects of fiscal policy uncertainty, declining productivity growth or structural changes in the labor market - all of which now appear to be playing a role to some degree."

He pointed out that during the 2008 to 2009 economic downturn in the U.S., skill level "made a large difference" in the ability of individual Americans to weather the recession and its aftermath.

"The opportunities available to current and future cohorts of young Americans thus seem inextricably tied to the skills they acquire," Lacker said.

Market News International is a real-time global news service for fixed-income and foreign exchange market professionals. See www.marketnews.com.

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