Federal Reserve endures criticism for easing policy
In an effort to stimulate the economy, the Federal Reserve recently decided to print money and bought $600 billion worth of treasury bonds. However, the move has been met with sharp criticism and the Fed is taking measures to defend their bold policy, The Wall Street Journal reports.
The most vocal critics have lambasted the plan, claiming that it will increase inflation and make an already weak economy even more volatile. Tennessee Republication Senator Bob Corker and Republican Congressman Mike Pence of Indiana have been leading the charge in opposition of the initiative. Both have called for the Fed to narrow its focus on inflation and employment, and want Congress to issue a mandate to urge them to do so. Others have called for a complete revision of the bank's job by limiting its powers.
"We gave the mandate to the Fed in the first place, we could easily change that," Corker told Bloomberg. "That's not politicizing, that's clarifying more fully what the Fed's role is."
Although the leading voices of discontent have been from the Republican party, the news source reports that some economists as well as finance officials from Germany, Brazil and China have also expressed doubt. While some analysts believe that the concerns may lead to a change in policy, Democratic Congressman Barney Frank blamed the opposition's differing ideology.
Despite the criticism, many members of the Federal Reserve believe that their actions are a step in the right direction. Eric Rosengren, president of the Federal Reserve Bank in Boston, is one supporter of the new policy.
"As long as the economic outlook doesn't improve dramatically I would expect that we will purchase the entire amount," he told the news source. "If the economy were to weaken and we were to get further disinflation and a higher unemployment rate, then we would have to reflect on whether we should take additional action."