An ineffective, fractious and fiscally irresponsible government has slowed the U.S. recovery and counteracted the stimulative effects of Federal Reserve's super-accommodative monetary policy, a top Fed official said on Monday.
"While the Fed has been moving at the speed of a boomer in full run, the federal government of the United States has at best exhibited the adaptive alacrity of a koala (without being anywhere near as cute)," Dallas Fed President Richard Fisher said in remarks prepared for delivery to the Australian Business Economists.
Continue Reading Below
"Unlike in most recoveries, government has played a countercyclical, suppressive role," Fisher said in Sydney. "The inability of our government to get its act together has countered the pro-cyclical policy of the Federal Reserve."
The Fed is buying $85 billion in assets each month to spur growth and hiring by pushing down long-term borrowing costs. The program is the Fed's third round of so-called quantitative easing, and last week it opted to extend its policy support after a series of soft readings on the economy.
Economists now think the Fed will wait until 2014 before starting to wind down asset purchases, although a clear pick-up in economic momentum could revive prospects for action at the Fed's December 17-18 meeting.
Fisher opposes the Fed's bond-buying program because he said he believes it can do little to boost the economy as long as lawmakers continue to bicker over the budget and fail to confront long-term fiscal imbalances.
He has also warned that keeping policy too easy for too long could seed future inflation.
Fisher will vote next year on the Fed's policy-setting panel.
(Writing by Ann Saphir; Editing by Steve Orlofsky)