Joe Manchin ‘deeply concerned’ about Fed’s easy money policy, urges Powell to cut back

Senator Joe Manchin, DW.Va., said Thursday he was “deeply concerned” about the Federal Reserve’s continued efforts to support the US economy and urged the central bank to scale back its emergency stimulus efforts .

“With the end of the recession and our strong economic recovery well underway, I am increasingly alarmed that the Fed continues to inject record amounts of stimulus into our economy,” the Conservative Democrat wrote in a letter. to Fed Chairman Jerome Powell.

Manchin said he was concerned that further stimulus from the Fed, combined with billions of Democrat-led spending, “will lead to an overheating of our economy and inevitable inflationary taxes that hard-working Americans cannot. not afford “.

Manchin has become a key figure in his party’s efforts to push through an ambitious legislative program backed by President Joe Biden.

The letter from the West Virginian came as the Senate debated amendments to the bipartisan $ 1 trillion infrastructure bill, which could be passed through the chamber in days.

Democrats, meanwhile, are drafting a separate $ 3.5 trillion reconciliation bill aimed at tackling climate change, supporting American workers and other priorities. Manchin’s vote is necessary for Democrats, as they will need all 50 members of their caucus to agree to pass the reconciliation bill, with Vice President Kamala Harris providing the deciding vote.

Representatives for Major Senate Leader Chuck Schumer, DN.Y., and the Fed did not immediately respond to CNBC’s requests for comment.

The Federal Reserve cut interest rates and began buying billions of Treasury securities in March 2020 to ensure easy access to capital as the Covid-19 virus forced thousands of US businesses to close.

Economists and politicians attribute to these measures alleviating the pandemic recession and promoting a faster rebound.

Some Fed officials, including Vice President Richard Clarida, have started signaling that it is almost time for the central bank to put the brakes on these emergency measures as the economy and inflation rebound.

Powell’s tenure expires in February, although he is seen as having a good chance of keeping his job. Manchin is not on the Senate Banking Committee, which will play a key role in determining the next Fed chairman.