Fed dissenter says latest step won't help economy

By The Associated Press | September 27, 2011 | 1:25 PM EDT

WASHINGTON (AP) — The president of the Federal Reserve Bank of Dallas says he opposed the Fed's latest attempt to boost economic growth because it probably won't work — and could scare consumers and hurt bank earnings.

Richard Fisher is one of three members of the Fed's policymaking committee who dissented last week from the Fed's plan to lower mortgage and other long-term interest rates by reshuffling investments. The Fed will switch $400 billion from short-term to long-term Treasurys.

Fisher says in prepared remarks that the move would narrow the spread banks earn from loans. It could also convince consumers the economy is "in worse shape than they thought" and prompt them to hoard money, he says.

Fisher also says Washington lawmakers should do more to help the economy.