Reuters: Regulatory News: UPDATE 1-Fed is sugar-coating Congress's task -Fisher

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UPDATE 1-Fed is sugar-coating Congress's task -Fisher Apr 30th 2012, 23:24 Mon Apr 30, 2012 7:24pm EDT By Ann Saphir LOS ANGELES, April 30 (Reuters) - The U.S. Federal Reserve's super-easy monetary policy is doing little to spur job creation and is giving Congress license to avoid tackling looming fiscal problems and the towering national debt, a top Fed official said on Monday. "By providing monetary accommodation, we are saying, in essence, 'Congress, you better eat your vegetables, or we are going to serve you a big plate of monetary cookies,'" Richard Fisher, president of the Dallas Fed, told the Milken Institute Global Conference. The Fed's program of bond purchases is pushing down the price of debt, interfering with a pricing mechanism that would otherwise force Congress to come to terms with its "fiscal misfeasance," he said. "We have children in Congress," he said. "They need to be disciplined." Unless Congress acts to reduce uncertainties around fiscal policy, the Fed's low-interest-rate policy will remain powerless to boost jobs, he said, reprising a theme he revisits often in speeches around the country. The U.S. central bank last week kept its policy on hold, reiterating its expectation that it will need to keep rates near zero through late 2014 to support a weak recovery. Fisher, who is not a voter this year on the Fed's policy-setting panel, has been a staunch opponent of further Fed easing and identifies as an inflation hawk. While the Fed has been successful in keeping inflation in hand, he said, its easy money policy has not succeeded in bringing unemployment down to acceptable levels. Unemployment registered 8.2 percent in March, well above the 5.5 percent rate that is typically seen as representing full employment in the United States. Asked to explain why low rates have not pushed unemployment down faster, Fisher said, "My argument is because of fiscal policy." Uncertainty over taxes and regulation are keeping businesses from hiring, Fisher added. Link this Share this Digg this Email Reprints

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