Marketwatch: Fed under siege in new Washington landscapeSubmitted by legalizeliberty on Wed, 11/17/2010 - 16:51
(MarketWatch) — The four Republicans expected to lead the House and Senate in the new Congress raised concerns Wednesday with the Federal Reserve’s recent decision to launch a $600 billion bond-buying program, the latest in a slew of political attacks on the central bank following the midterm election earlier this month.
Analysts are concerned that the heat from the debate may force the Fed to limit its bond-buying program and also weaken its beneficial effects.
Political scientists agree that the midterm election strengthened the extreme wings of both the Republican and Democratic parties at the expense of moderates who were natural allies of the central bank.
The latest salvo at the Fed came in a letter signed by Republican Senate leader Mitch McConnell and Rep. John Boehner, the House Republican leader who will be the next Speaker of the House and their top deputies, Senator John Kyl of Arizona and Rep. Eric Cantor of Virginia.
The Republican leaders complained the bond buying program “introduces significant uncertainty regarding the future strength of the dollar,” and “perhaps more damaging, we believe that [the Fed bond buying program] is giving the impression that the Federal Reserve will keep making new and different attempts to boost the short-term prospects of the economy.”