SAN ANTONIO (Reuters) - Uncertainty over tax
policy and new regulations is hindering U.S. businesses, making
any potential further monetary accommodation by the Federal
Reserve likely ineffective, a top Federal Reserve official said
on Thursday.

Despite near-zero interest rates and plenty of access to
liquidity, businesses are not spending money because they do
not know how new regulations on everything from the financial
system to healthcare will affect them, Dallas Federal Reserve
President Richard Fisher said in the text of remarks to the
Greater San Antonio Chamber of Commerce.

Signs are rife that the U.S. economic recovery is slowing,
with retail and housing sales down, manufacturing slowing, and
unemployment at a stubbornly high 9.5 percent. Some Fed
officials, including Fed Chairman Ben Bernanke, have recently
raised the possibility that the Fed may need to ease monetary
policy further if the economy worsens.

Fisher said such a move would be ineffective, and could
even make matters worse.

Businesses are distressed and dispirited by uncertainty
over upcoming rule changes and are unable to conduct long-term
planning, he said.

"They are calling time-outs and heading to the sidelines
while they wait for the referees to settle on the rules of the
game," Fisher said. "If this is so, no amount of further
monetary policy accommodation can offset the retarding effect
of heightened uncertainty over the fiscal and regulatory
direction of the country."

To pull the economy out of its freefall in 2008, the Fed
lowered short-term interest rates to near zero and bought $1
trillion in assets to pump liquidity into the financial system.
The U.S. government began a program of fiscal stimulus, and
businesses are now worried how lawmakers will deal with
ballooning debt, Fisher said.

Fisher sought to assure his audience that the Fed will not
allow itself to be pushed into printing money to resolve the
deficit and signaled he would would oppose any further easing
on that basis.

"One could posit that further monetary accommodation might
make the situation worse if private sector operators were to
conclude that the Federal Reserve has become politically
pliable and is prone to substituting such accommodation for
fiscal discipline," he said.

Calling price stability the Fed's "ultimate goal," he said
the U.S. central bank will not tolerate either inflation or
deflation.

"The Federal Reserve is absolutely committed to its goal of
achieving price stability," he said. "This entails keeping
inflation extremely low and stable."

U.S. businesses are facing a possibly unprecedented degree
of potentially important rules changes just about a year into
an economic recovery that began last summer.

U.S. President Barack Obama earlier this month signed a
sweeping financial regulation overhaul into law that is
designed to prevent another blowout like the one that
devastated markets in 2008.

Also, new healthcare legislation could drastically change
the cost of providing healthcare coverage for many U.S.
businesses.

Regulators, including the Fed, will need to provide clarity
on how they will implement the new Wall Street rules before
businesses will be able to invest in growth, he said.

For more stories on Fed policy go to [FED/AHEAD]
(Reporting by Ann Saphir; Editing by Padraic Cassidy)