[ad_1]
Senator Joe Manchin (D-WV) has called on the Federal Reserve to reduce its monetary stimulus.
Despite rising inflation, the Federal Open Market Committee – which oversees the execution of monetary policy in the United States – has so far decreases change its near-zero interest rate target or cut its $ 120 billion in monthly asset purchases.
Manchin argued on a Thursday letter to Fed Chairman Jerome Powell that the stimulus is no longer deserved given the rebound in the US economy:
With the recession over and our strong economic recovery well underway, I am increasingly alarmed that the Fed continues to inject record amounts of stimulus into our economy by pursuing an emergency level of quantitative easing (QE ) with asset purchases of $ 120 billion per month in treasury bills. mortgage-backed securities and securities.
The record amount of stimulus in the economy has led to the strongest inflation momentum in 30 years, and our economy has not even fully reopened yet. I am deeply concerned that the continued stimulus proposed by the Fed and the proposed additional fiscal stimulus will lead to an overheating of our economy and inevitable inflationary taxes that hard-working Americans cannot afford.
While I appreciate your commitment to maximum employment and stable prices, it is imperative that we begin to understand that long-term policy responses tailored to an economic depression, such as the Great Depression and the Great Recession of 2008 , may not be what is needed for today’s economy and could result in more inflation than desired if not removed in time.
On Tuesday, Christopher Waller, a member of the Fed’s Governing Council, provided one of the first hints that the central bank will start shrinking this fall.
In an interview with CNBC, Waller – who sits on the Federal Open Market Committee – noted that the monetary and fiscal stimulus measures have achieved their objectives.
“In my opinion this is substantial progress and I think you might be ready to make an announcement in September,” he explained, adding that while the next two jobs reports “are as strong as the last, then I think you’ve made the progress you need. If they don’t, “then you’re probably going to have to put it off for a few months.”
“In my opinion, with the tapering we should go early and go fast to make sure that we are able to raise rates in 2022 if we have to,” he said. “I’m not saying we would, but if we wanted to, we need to have political space by the end of the year.”
Waller said he heard “anecdotal evidence” that business contacts are able to pass higher prices on to consumers. “They have every intention of doing it. They have the pricing power for the first time in a decade. These are the kinds of issues that make you worry that it is not transient. “
The Daily Wire is one of the fastest growing conservative media companies in the United States and a counter-cultural media for information, opinion and entertainment. Get inside The Daily Wire by becoming a member.
[ad_2]
Source link