Richard Fisher Not Thrilled With Congress Either

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The Dallas Fed president sure does hate quantitative easing. But he really, really hates our elected officials.

Speaking at a luncheon hosted by financial-industry trade group the Dallas Estate Planning Council at the Dallas Country Club, Mr. Fisher said the central bank has done all it can to stimulate the U.S. economy. He said members of Congress–both Republicans and Democrats–have failed to do their part. Elected officials have “sold our children–and our grandchildren–down the river,” Mr. Fisher said. “We haven’t had a budget for five years; no one knows what their taxes are going to be; no one knows what spending is going to be.”

The Dallas Fed president has long maintained that the missing ingredient in the economic recovery is a sound fiscal policy. He argues that deadlock in Washington over a budget plan has created a “fog” of uncertainty. Poor visibility makes it difficult for business owners to plan expansion and hiring, Mr. Fisher noted….

Similarly, Mr. Fisher said, the Dodd-Frank financial overhaul had failed. The stated aim of the legislation was to bring an end to a regime in which certain banks were “too big to fail,” he said. Yet more financial assets are concentrated in fewer hands than ever before, Mr. Fisher said. He proposed an alternative solution–a requirement that banks sign a disclaimer attached to transactions, saying they would not accept a government bailout to cover any losses.

Meanwhile, in Chicago (South Carolina, actually), Charlie Evans, who doesn’t hate QE nearly as much, or at all, was musing on when he and his compatriots should start to cut back. And he came up with another reason not to—even though it appears it was not needed.

Federal Reserve Bank of Chicago President Charles Evans, who has consistently supported record stimulus, said the Fed shouldn’t taper its $85 billion in monthly bond buying until inflation and economic growth pick up.

“To start the wind-down, it will be best to have confidence that the incoming data show that economic growth gained traction during the third quarter of this year and that the transitory factors that we think have held down inflation really do turn out to be transitory,” Evans said today in a speech in Greenville, South Carolina….

The Fed should press on with bond buying until unemployment declines to about 7 percent, with forecasts of a continuing decline; other labor market indicators show similar improvement; and data elicit “considerable confidence” that inflation is moving back toward 2 percent, Evans said.

Fed's Fisher Slams Congress Over Fiscal Policy [WSJ Real Time Economics blog]
Fed's Evans Wants to See Inflation Quicken Before QE Taper [Bloomberg]

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