Dallas Federal Reserve President Richard Fisher said Thursday that regulatory uncertainty is hindering the nation's economic recovery.

Speaking in San Antonio, Fisher said that such uncertainty will also make any further monetary accommodation from the Fed ineffective.

"No amount of further monetary policy accommodation can offset the retarding effect of heightened uncertainty over the fiscal and regulatory direction of the country," Fisher said in prepared remarks.

He added, "Businesses and consumers are being confronted with so many potential changes in the taxes and regulations that govern their behavior that they are uncertain about how to proceed downfield."

The Dallas chief added that recent data pointed to a "suboptimal" level of growth that could fall below three percent for a prolonged period.

Fisher's remarks reflect a recently downgraded economic outlook from the Fed, and also come one week after Federal Reserve chairman Ben Bernanke told Congress that the Fed was prepared to take additional policy action if it needs to.

Fisher said that regulators would need to be clear on how new policies would be implemented before business could become comfortable investing in growth.

Until business operators are provided the clarity they need, they will continue to hoard their cash, limit their payrolls and constrain investment in new plant and equipment—none of which provides hope for the unemployed or will put us on a more forceful path to recovery," he said.

The Dallas chief also stressed that the central bank would not be forced to print additional money to close the deficit, an indication that he would not support such an action if it were discussed, adding that further monetary accommodation could hinder the recovery.

Earlier in the day, St. Louis Federal Reserve President James Bullard said that the Fed's current policies are putting the U.S. at risk for "a Japanese-style deflationary outcome within the next several years," and added that a pledge to keep the Fed's federal funds target rate near zero could be detrimental, as it could cause a decline in prices.