Federal Reserve Bank of Dallas president Richard Fisher said Monday that the Fed has provided sufficient liquidity.He said he would oppose extending or expanding monetary accommodation and would vote to halt the $600 billion asset-purchase quantitative-easing plan known as QE 2 that continues through June. However, he declared, further monetary accommodation will not help.
“It might well retard job creation, should it give rise to inflationary expectations or, worse, imply that, having suffered the slings and arrows of popular and political contempt as we went about doing what we did to save the financial system, we have now been compromised and become a pliant accomplice to Congress’ and the executive branch’s fiscal misfeasance,” Fisher said.
“I am wary of those risks. Indeed, as a voting member of the FOMC this year, I have made clear within the meeting room and in public speeches that, barring some frightful development, I will vote against any program that might seek to extend or enlarge the substantial monetary accommodation we already have provided, just as I argued against the $600 billion extension the voters on the Committee approved last November.
“And I remain doubtful enough as to its efficacy that if at any time between now and June it should prove demonstrably counterproductive, I will vote to curtail or perhaps discontinue it,” Fisher said. “The liquidity tanks are full, if not brimming over. The Fed has done its job. What is needed now is for business to be incentivized to commit that liquidity to creating American jobs. This is the task of the fiscal authorities.”