JACKSON HOLE, Wyo. ( TheStreet) -- A voting member of the Federal Reserve's policy-setting committee expressed doubt Saturday about the effectiveness of further monetary stimulus, according to a published media report.
"It's a close call" on whether the central bank should provide further stimulus to the economy, said Federal Reserve Bank of Atlanta President Dennis Lockhart, according to a report posted on The Wall Street Journal's Web site.
Lockhart reportedly said that current uncertainty over the nation's fiscal policy -- including the so-called "fiscal cliff" -- would mute the impact of further monetary stimulus. The bank official added that the European debt crisis was another factor creating economic uncertainty.
"There really is a lot to be solved on the fiscal side to create the conditions, arguably, in which further monetary action could really boost the economy," Lockhart was quoted saying.The fiscal cliff refers to the federal tax increases and spending cuts that are set to kick in at year's end unless lawmakers -- fiercely divided along partisan lines -- can come to an agreement on fiscal policy. Economists fear the combination of tax increases and spending cuts will hurt an already-fragile economy. > > Bull or Bear? Vote in Our Poll Lockhart was speaking on the sidelines of the Kansas City Fed's annual research conference in Jackson, Hole, Wyo., the report said. "I'm increasingly of the view that we are on a track that you would, to simplify it, would say is about a 2% growth track with fluctuating job growth. But overall, not a strong enough pace to bring down unemployment to anything close to a notion of full employment in a reasonable time," Mr. Lockhart said, according to the Journal. Lockhart said the key question was whether additional monetary stimulus would change that trend, according to the report. "That's a very tough question. I am not highly confident in the ability of simply monetary action to jump-shift the economy onto a different track," Mr. Lockhart was quoted saying. Lockhart's came one day after a speech by Fed Chairman Ben Bernanke was received bullishly by the stock market. Many on Wall Street interpreted Bernanke's speech to mean that further monetary stimulus would be forthcoming. But Lockhart cautioned against such an interpretation, saying Bernanke's speech was an attempt to "take stock" of the central bank's recent stimulus efforts, according to the Wall Street Journal report.