By Brai Odion-Esene

DALLAS (MNI) – The U.S. economy has almost grounded to a halt, but
further action by the Federal Reserve is not the remedy, Dallas Fed
President Richard Fisher said Tuesday.

Speaking to reporters after a speech to the Dallas Assembly, Fisher
said it is now time for U.S. fiscal policymakers to take on the
responsibility of aiding the economic recovery.

The FOMC statement on the economic outlook reflected the “consensus
of the committee,” Fisher said, adding that what he differed on was the
prescription. The U.S. economy has some forward momentum, although it is
weak, but businesses and consumers are on pause, he added, with
uncertainty about the future rampant.

“I would say we are getting close to stall speed here,” he said.

A lot depends on fiscal authorities, and whether they will “get
their act together or not, Fisher said. “You cannot rely on the Federal
Reserve, we can’t do it alone.”

Fisher said his comments should not be taken to mean that the Fed
is “out of bullets,” just that its powers must be extended carefully.

“Whatever ammunition is still in our holster, we need to employ
very, very carefully,” he said.

There is also the question if Congress’ response will be in a
manner that provides confidence that they will deal with the country’s
long-term problems “without driving us into recession,” he added.

Right now the Fed has “very accommodative” monetary policy, Fisher
said, which he believes to be more than enough. The problem, he
reiterated, comes for fiscal and regulatory uncertainty.

The Fed, Fisher said in response to a question from Market News
International, can only do effective things. “If we are pushing on a
string then what we are doing is counterproductive or ineffective.”

Asked what signs he and other members of the FOMC would need to see
in order to begin withdrawing monetary stimulus, Fisher said once there
is a pick up in consumption then “we could be talking once again about
exit strategies.”

Fisher has consistently opposed the Fed’s quantitative easing
measures since the first program was implemented late last year, and
while two others have dissented with him, he implied that he has more
support within the committee.

“As you know, there are two other presidents that are dissenters
and there are others who may not be voting who harbor similar views,” he
said.

As for the ongoing European sovereign debt crisis, Fisher said it
was not the business of the U.S. to interfere, and it is up to EU
authorities, working with the European Central Bank, to craft a
resolution.

On these shores, federal regulators must make sure there is no
contamination, and that U.S. financial institutions are not exposed to
any “trip wires” or contagion from Europe’s woes.

** Market News International Washington Bureau: 202-371-2121 **

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