Forex & CFD Analytics

Dallas Federal Reserve President Richard Fisher said Thursday that regulatory uncertainty is hindering the nation's economic recovery.

Speaking in San Antonio, Fisher said that such uncertainty will also make any further monetary accommodation from the Fed ineffective.

"No amount of further monetary policy accommodation can offset the retarding effect of heightened uncertainty over the fiscal and regulatory direction of the country," Fisher said in prepared remarks.

He added, "Businesses and consumers are being confronted with so many potential changes in the taxes and regulations that govern their behavior that they are uncertain about how to proceed downfield."

The Dallas chief added that recent data pointed to a "suboptimal" level of growth that could fall below three percent for a prolonged period.

Fisher's remarks reflect a recently downgraded economic outlook from the Fed, and also come one week after Federal Reserve chairman Ben Bernanke told Congress that the Fed was prepared to take additional policy action if it needs to.

Fisher said that regulators would need to be clear on how new policies would be implemented before business could become comfortable investing in growth.

Until business operators are provided the clarity they need, they will continue to hoard their cash, limit their payrolls and constrain investment in new plant and equipment