DALLAS (Reuters) - Europe’s financial crisis threatens U.S. economic growth because the continent is America’s largest trading partner, Dallas Federal Reserve President Richard Fisher said on Friday.
Still, there is not much U.S. policymakers can do other than hope European leaders find a solution to the problem, Fisher said.
“We want to make sure they maintain their growth. (But) we are innocent bystanders,” Fisher said.
Asked about U.S. monetary policy, Fisher, who this year dissented against further stimulus, said the central bank had done all it could, and it was now up to legislators to get growth going.
“We’ve done enough,” he said.
U.S. economic data have struck a somewhat better tone of late, prompting Fed officials to pause at their November meeting. But analysts still believe more monetary stimulus could be forthcoming if Europe’s morass leads to a broader financial crisis.
Fisher, a self-dubbed inflation hawk, said he believes U.S. consumer prices will continue their recent decline, trending toward the central bank’s implicit goal of about 2 percent inflation.
Reiterating his concern about large U.S. debt levels, Fisher said Europe’s situation was a cautionary tale.
“Unless our politicians get their act together...the bond market will take their vengeance on us as well,” he said.
Reporting by Pedro Nicolaci da Costa; Editing by Andrea Ricci