By Jim Forsyth
SAN ANTONIO, March 6 Despite the efforts of the
U.S. Federal Reserve to use easy monetary policy to boost jobs,
the country's economy is stuck in "neutral" more than three
years after the end of the recession, a top Fed official said on
"It is not possible to create jobs through monetary policy
alone," Dallas Fed President Richard Fisher said at a World
Affairs Council of San Antonio event. "The U.S. remains the
economic engine of the world ... it's not China, it's not
Europe, it's the U.S., and the U.S. remains in neutral."
Fisher, repeating a well-worn analysis of the limits of the
Fed's super-easy monetary policies, said the U.S. central bank
did not have the power to pull the economy from its standstill
as long as U.S. lawmakers did not do their part.
"You know how horrid things are in Washington," Fisher said.
"We have provided fuel for an economic recovery because Congress
and the executive have not provided the incentives for growth."
The U.S. central bank has kept interest rates at rock bottom
for more than four years and is currently buying Treasury and
mortgage bonds in an effort to keep longer-term borrowing costs
low enough to spur spending and hiring.
Yet unemployment is relatively high, at 7.9 percent, and
inflation remains stubbornly below the Fed's 2 percent target,
curtailing the boost that near-zero short-term interest rates
can give the economy.
Fisher, who does not vote on the Fed's policy-setting
committee this year, has been a vocal opponent of the Fed's
bond-buying program, saying it can do little as long as
lawmakers do not address the nation's debt problem and provide
businesses with needed fiscal certainty.
U.S. political leaders have so far failed to bridge a
dispute over the budget, triggering broad spending cuts that
both political parties deplore and setting the stage for fiscal
tightening that could drag economic growth down sharply. [ID:
Fisher has questioned the bond-buying program's
effectiveness at keeping interest rates low, and on Wednesday
gave partial credit for historically low U.S. interest rates to
China's massive purchases of U.S. debt
"They help us keep interest rates down and it is an
expression of faith in the U.S. economy," he said, referring to