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Lacker says Fed can't counter U.S. fiscal uncertainty

Federal Reserve Bank of Richmond President Jeffrey Lacker testifies before the House Financial Services Committee hearing on "Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts" on Capitol Hill in Washington June 26, 2013. REUTERS/Yuri Gripas

BALTIMORE (Reuters)- The Federal Reserve does not have the power to counter the drag on economic growth from a prolonged U.S. budget battle, Richmond Fed President Jeffrey Lacker said on Friday.

"Federal Reserve policies cannot necessarily counteract the effects of fiscal policy uncertainty, declining productivity growth or structural changes in the labor market - all of which appear to be playing a role to some degree," Lacker told an economic education conference.

Lacker is an inflation hawk who has been skeptical of the central bank's unconventional policies. While he focused his remarks mostly on financial literacy and education, his overall message remained the same.

"As we've seen during the recovery from the Great Recession, there are significant limits to the power of monetary policy to affect the real economy," he said.|

(Reporting by Pedro Nicolaci da Costa; Editing by Andrea Ricci)