David J. Lynch and Mike Dorning
Nov 17, 2010
The Federal Reserve is facing the fiercest political assault on its powers in three decades as it struggles to help revive the U.S. economy.
The Fed’s plan to expand its purchases of Treasury securities has triggered criticism from Republican lawmakers, some economists who wrote an open letter to the Fed protesting the move, and finance officials in Germany, China and Brazil.
While central bank officials are pressing ahead with the $600 billion bond-buying program announced this month, analysts said the criticism may fan dissent within the Fed over the quantitative-easing policy. That may limit Chairman Ben S. Bernanke’s ability to take further measures if the economy remains weak.
“The Republican economists are reflecting a broad sentiment within the Republican Party, and I don’t think the Fed wants to get into a major confrontation with one of the two parties in Congress,” said Vin Weber, managing partner of the lobbying firm Clark & Weinstock and a former Republican congressman from Minnesota. “It’s not going to kill quantitative easing 2, but it will curtail further easing.”
This article was posted: Wednesday, November 17, 2010 at 10:29 am