Manchin confronts the Fed with concerns about inflation
In a letter to Jerome Powell, the West Virginia Democrat voiced concern over the Fed's continued purchasing policies
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Democratic Sen. Joe Manchin is urging the Federal Reserve to slow increasing inflation by putting the brakes on stimulus spending.
"The record amount of stimulus in the economy has led to the most inflation momentum in 30 years, and our economy has not even fully reopened yet," the West Virginia senator told reserve Chairman Jerome Powell in a letter Thursday. "I am deeply concerned that the continuing stimulus put forth by the Fed, and proposal for additional fiscal stimulus, will lead to our economy overheating and to unavoidable inflation taxes that hard working Americans cannot afford."
Manchin also said he is "increasingly alarmed" that the Central Bank continues to purchase $120 billion in U.S. government debt and mortgage-backed securities every month regardless of the trillions of dollars Congress has funneled into the economy.
Manchin's letter is a rare rebuke of the actions of the Federal Reserve from a member of the unified party in power in Washington. It is also a break with President Biden's economic advisers who have insisted that current inflation trends are temporary and Congress should continue to pump trillions into the economy by way of infrastructure and social spending packages.
"Simply put, our monetary and fiscal stimulus response met the moment of crisis when our economy suffered the medical equivalent of a heart attack," continued Manchin, a moderate who holds a key vote in the evenly-divided Senate on more proposed spending.
"But, now It’s time to ensure we don’t overprescribe the patient by further stimulating an already strong recovery and therefore risk our ability to respond to future crises we are sure to face."
Manchin's letter comes as the president weighs whether to reappoint Powell for another term as Fed chairman and could serve as an indicator that he is not uniformly back by the moderate wing of the president's party.
The central bank is reportedly planning to issue a response to Manchin's letter.
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