| GAINESVILLE, Texas
GAINESVILLE, Texas Dec 18 The U.S. Federal
Reserve's bond-buying programs on their own are not enough to
help boost jobs, because there is too much uncertainty holding
businesses back from hiring, a top Fed official said on Tuesday.
"Quantitative easing is a necessary but insufficient tool to
spark job creation," Dallas Fed President Richard Fisher said at
the Gainesville Area Chamber of Commerce. "Employers will not
deploy the cheap and abundant capital on hand toward job
creation while there is so much uncertainty surrounding final
demand for the goods and services they sell."
Businesses are also holding back because of uncertainty over
the so-called fiscal cliff, he said, because they do not know
what their taxes will be or how government spending patterns
will affect them.
The Fed last Wednesday said it would keep interest rates
near zero until unemployment -- now at 7.7 percent -- fell at
least to 6.5 percent, as long as inflation does not rise above
2.5 percent. It was the first time the Fed had picked a specific
marker for unemployment to guide policy.
It also said it would buy $45 billion in longer-term
Treasuries each month, on top of its monthly purchases of $40
billion in mortgage-backed securities, until it sees a
substantial improvement in the outlook for the U.S. labor
The Fed will fund the new Treasury purchases with an
expansion of its $2.9 trillion balance sheet. Under the expiring
"Operation Twist" program, the Fed bought an identical amount,
but paid for them with proceeds from sales and redemptions of