Low interest rates and stimulus programs such as the Fed's USD85 billion in monthly asset purchases, a monetary policy tool known as quantitative easing designed to encourage investing and hiring, have helped U.S. factories and businesses in the past.
Now it's time for Congress to follow suit with necessary tax and other reforms to bring the sector out of a two-year rut.
"Our manufacturers, like all businesses public and private—large, medium and small—have also been given more than abundant natural gas and other sources of energy for their operations: They have been given abundant, super-cheap monetary fuel needed to stoke up their production engines and expand their businesses," Fisher said earlier Thursday, according to prepared remarks of a speech he delivered at the U.S. Manufacturing Summit in Orlando, Florida.
So what is holding manufacturing back?
"The remaining obstacle to being the absolute best economy for manufacturers and other businesses, bar none, has been fiscal and regulatory policy that seems incapable of providing job-creating manufacturers and other businesses with tax, spending and regulatory incentives to take advantage of the cheap and abundant fuel the Fed has provided," Fisher said.
"The most vexing and self-inflicted inhibitor of all: fiscal and regulatory policy of the gang that can't shoot straight in Washington."
Fisher, a noted monetary hawk, did not delve too much into the topic as to when the Fed will begin scaling back monthly asset purchases.
"While there are many risks in the policy that the Fed has been pursuing (and God and anyone who has suffered through my speeches the past few years knows I fret about those risks), every manufacturer of goods in America has been given a great gift by your central bank—the lowest cost of money in 237 years, an extension of the roaring bond market rally that has now run 32 years, and a broad stock market rally that began in March of 2009 and has gone on to bust through all previous record highs," Fisher said.
"After recovering most of the losses from the Great Recession, manufacturing growth has, on net, decelerated in the last two years. Ask any manufacturer what holds him or her back and they will tell you that they can't operate in a fog of total uncertainty concerning how they will be taxed or how government spending will impact them or their customers directly."
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