U.S. Senator Joe Manchin urges Fed to reduce asset purchases to minimize inflation risks
By Jonnelle Marte
(Reuters) - US Senator Joe Manchin wrote to Fed Chairman Jerome Powell, urging the Federal Reserve to withdraw some of its economic support in which West Virginia’s moderate Democratic legislature said it feared an easy monetary policy could fuel higher inflation.
"Now that the recession is over and our strong economic recovery is in full swing, I am increasingly concerned that the Fed is continuing to inject record levels of stimulus into our economy by continuing an emergency level of quantitative easing," wrote Manchin.
Fed officials cut short-term interest rates to near zero last year and began buying $ 120 billion in government bonds in a month to stabilize markets and prop up the economy after being disrupted by the coronavirus pandemic.
Policy makers are currently debating how to reduce these purchases, and Fed vice chairman Richard Clarida said Wednesday that it was possible that Fed officials could announce a slowdown in the buying pace later this year.
A Fed spokeswoman confirmed the central bank had received the letter but declined to comment.
Manchins credited the Fed's swift action and robust Congressional aid packages to bolster the economy through last year's deep but brief recession. However, he said he was also concerned that additional fiscal stimulus "could overheat our economy and inevitable inflation taxes that hard-working Americans cannot afford."
The $ 1.9 trillion bailout plan passed earlier this year has been criticized by Republicans and some Democrats, including former Treasury Secretary Lawrence Summers, who said they were concerned it could create inflationary pressures.
Senators are currently considering a bipartisan infrastructure bill worth $ 1 trillion, and some Democrats are advocating another $ 3.5 trillion proposal.
Legislators do not make monetary policy, but the Senate must approve President Joe Biden's candidate to run the central bank. The White House must decide whether to keep Powell after his term in office, as the chairmanship expires in February 2022.
(Reporting by Jonnelle Marte; editing by Sandra Maler)
You should check here to buy the best price guaranteed products.
Britney vs Spears | Official Trailer | Netflix
Fed signals bond-buying taper coming 'soon'
10 states from Midwest to Northeast under flood watches
Why is vitamin D essential to us?
Rich kids and poor kids face different rules when it comes to bringing personal items to school
STAR TREK’s “Genesis Trilogy” Proved You Don’t Need a Plan