Dallas Federal Reserve Bank President Richard Fisher said on Friday that U.S. monetary policy was at risk of over-extension. According to Mr. Fisher, there is an enormous amount of liquidity sloshing around and any further stimulus will not help and could even harm the US economy.[From Reuters] : “Today we have abundant liquidity and the cost of money is zero,” he said, adding that no amount of policy accommodation or new accommodation would solve the U.S. economy’s problems.
“Today we have abundant liquidity and the cost of money is zero.”
“We did our job as a central bank, we may have done too much,” he told an event on ‘Which way for the U.S. economy’, organized by the Bruegel institute in Brussels. “We will no longer press on the monetary pedal.”
Fisher, regarded by economists as one of the most hawkish policymakers at the Fed, said the Federal Reserve’s $600 billion bond-buying program should end as planned in June, reiterating his view that no further monetary stimulus will be needed after that.
“It’s time to call a spade a spade…We may have overdone our job. We have done enough. We are at risk of doing too much. I don’t believe we will,” Fisher said.
“My admonition to our political authorities is, ‘don’t look at us, look at yourselves. Come, be disciplined, be persistent, press on’. We will no longer press on the monetary pedal in my opinion,” he continued.