Fed's Fisher says tying policy to economic markers 'bad idea'

PALO ALTO, Calif. Thu Nov 15, 2012 4:23pm EST

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PALO ALTO, Calif. Nov 15 (Reuters) - It would be a "bad idea" to tie monetary policy to specific economic conditions, Dallas Fed President Richard Fisher, a top Federal Reserve official and critic of easy Fed policy, said on Thursday.

On Tuesday, Fed Vice Chair Janet Yellen embraced the idea, saying that adopting numerical thresholds for unemployment and inflation could help guide expectations on when rates would go back up.

But Fisher said he disagreed, in large part because while the Fed can and has set an inflation target, it cannot define full employment.

"It is very difficult for us to state specific employment targets," Fisher said, adding that the real reason the economy is not growing is not because the Fed has fallen short on rate guidance but because of uncertainty over the country's fiscal future.

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