U.S. Markets

Fed's Fischer said political uncertainty holding back investment

FILE PHOTO: U.S. Federal Reserve Vice Chair Stanley Fischer addresses The Economic Club of New York in New York, U.S. on March 23, 2015. REUTERS/Brendan McDermid/File Photo

(Reuters) - U.S. companies are likely holding back on investing in their businesses due to an uncertain outlook for government policies, Federal Reserve Vice Chairman Stanley Fischer said on Monday.

Speaking in Rio de Janeiro, Fischer said uncertainty over the outlook for health care, regulation, taxes and trade could prompt firms to delay projects until the policy environment is clearer.

Fischer did not mention the administration of President Donald Trump by name.

Trump has pledged to overhaul health care, regulation, taxes and trade, but has had little success in getting his agenda through Congress.

One reason U.S. firms are investing tepidly despite low interest rates is because gains in worker productivity appear to be slowing, Fischer said.

“But elevated uncertainty, both political and economic, has likely also played a role,” Fischer told a closed-door conference.

Reporting by Jason Lange in Washington; Editing by Bernadette Baum