A Few Snippets From Fisher’s Speech

• Posted by Robert Sinn
• on September 27th, 2011

Dallas Fed President just released a speech entitled “Explaining Dissent on the FOMC’s Vote for Operation Twist”  wherein he offers his rationale for dissenting from the FOMC’s most recent policy action. I will let you click over to read the speech in its entirety, however, here are a few snippets from Fisher’s speech which I found to be of particular interest:

“I believe, however, that there is significant risk that the policies recently undertaken by the FOMC are likely to prove ineffective and might well be working against job creation.”

“For years, I have been arguing that monetary policy cannot solve the problem of substandard economic performance unless it is complemented by fiscal policy and regulatory reform that encourages the private sector to put to work the affordable and abundant liquidity we are able to create as the nation’s monetary authority. These actions are not within the Fed’s purview; they are the business of Congress and the president.”

“Monetary policy is not Thor’s hammer. It is an awesome weapon. But it has limitations. We must carefully harbor its power. If we deploy it incorrectly, we might level more than interest rates and destroy that which we seek to create. And if we let it fly too far from our grasp, we may never get it back. In conducting policy going forward, we must constantly bear this in mind.”

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