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4 Nov 2013
Fed's Fisher points finger at US government for sluggish recovery
FXstreet.com (Barcelona) - Dallas Fed President Richard Fisher crossed the wires with some interesting out-takes as part of remarks delivered to Australian Business Economists. The comments underscore in quite an explanatory fashion the sour mood between some members of the Fed and the irresponsible political actions by Washington.
As Fisher said, quoted by Reuters: "An ineffective, fractious and fiscally irresponsible government has slowed the U.S. recovery and counteracted the stimulative effects of Federal Reserve's super-accommodative monetary policy."
He added: "While the Fed has been moving at the speed of a boomer in full run, the federal government of the US has at best exhibited the adaptive alacrity of a koala. Unlike in most recoveries, government has played a countercyclical, suppressive role. The inability of our government to get its act together has countered the pro-cyclical policy of the Federal Reserve."
The comments come amid plenty of controversy regarding the time extension by which the Fed should keep buying $85 billion in assets each month, in order to create a sustainable economic recovery. The latest chatter, while lacking some substance, is that the Federal Reserve may still consider starting taper in Dec. As John Noonan, Head of IFR Markets, notes: "This week, a slew of Fed speakers including Bernanke should offer clues as to whether a Dec taper is a realistic expectation."
Since last Wednesday, when the FOMC published a less-dovish-than-expected statement, the USD has been enjoying more buying interest by traders. However, consensus among economists and banking institutions remains that the Fed will postpone any tapering until at least 2014, especially amid poor prospects of a pick up in momentum by the US economy after the government shutdown, likely to have affected business and consumer sentiment as distrust towards politicians builds.
Fisher opposes the Fed's bond-buying program because he said he believes it can do little to boost the economy as long as lawmakers continue to bicker over the budget and fail to confront long-term fiscal imbalances.
As Fisher said, quoted by Reuters: "An ineffective, fractious and fiscally irresponsible government has slowed the U.S. recovery and counteracted the stimulative effects of Federal Reserve's super-accommodative monetary policy."
He added: "While the Fed has been moving at the speed of a boomer in full run, the federal government of the US has at best exhibited the adaptive alacrity of a koala. Unlike in most recoveries, government has played a countercyclical, suppressive role. The inability of our government to get its act together has countered the pro-cyclical policy of the Federal Reserve."
The comments come amid plenty of controversy regarding the time extension by which the Fed should keep buying $85 billion in assets each month, in order to create a sustainable economic recovery. The latest chatter, while lacking some substance, is that the Federal Reserve may still consider starting taper in Dec. As John Noonan, Head of IFR Markets, notes: "This week, a slew of Fed speakers including Bernanke should offer clues as to whether a Dec taper is a realistic expectation."
Since last Wednesday, when the FOMC published a less-dovish-than-expected statement, the USD has been enjoying more buying interest by traders. However, consensus among economists and banking institutions remains that the Fed will postpone any tapering until at least 2014, especially amid poor prospects of a pick up in momentum by the US economy after the government shutdown, likely to have affected business and consumer sentiment as distrust towards politicians builds.
Fisher opposes the Fed's bond-buying program because he said he believes it can do little to boost the economy as long as lawmakers continue to bicker over the budget and fail to confront long-term fiscal imbalances.