Not only wouldn’t further monetary policy accommodation help the economy, it would make the Federal Reserve complicit with the federal government’s “mischief,” Federal Reserve Bank of Dallas president Richard W. Fisher said Tuesday.
Accommodation would add to “the already-enormous uncertainty and angst that businesses face with our reckless fiscal policy,” which “would be the road to perdition” for the Fed, Fisher said in remarks at St. Andrews University, according to a text released by the Fed.
“There is in the marketplace a lingering fear that the Fed has already expanded its balance sheet to its stretching point and that an exit strategy, though articulated, remains theoretical and untested in practice,” he said. “And there is a growing sense that we are unwittingly, or worse, deliberately, monetizing the wayward ways of Congress.
“I believe that were we to go down the path to further accommodation at this juncture, we would not simply be pushing on a string but would be viewed as an accomplice to the mischief that has become synonymous with Washington.”