The president of the Federal Reserve Bank of Kansas City, Thomas Hoenig, said there's a limit to how much more the central bank can help the U.S. economy and that the focus should now be on solving the country's fiscal problems.
"We can't do it all," Hoenig, the central bank's longest-serving policymaker, said in an interview from Jackson Hole, Wyo., where the Kansas City Fed is hosting the central bank's annual symposium. "We have a problem in this country with debt" and "if we don't turn to the long run, we will be dealing with overnight crises for as far as the eye can see."
The regional bank chief joined colleagues like Richard Fisher, the president of the Federal Reserve Bank of Dallas, by saying monetary policy cannot be expected to cure all that ails the economy, and should not be used to target high unemployment. Hoenig, who does not vote on the Federal Open Market Committee this year, said it probably isn't "a surprise" to learn that he would have dissented against the FOMC's Aug. 9 decision to keep rates near zero through at least mid-2013. "Monetary policy is an important tool, it is a valuable tool, but it is not an exclusive tool," Hoenig said in the interview. Yet "it does not solve all problems."
