US Democratic Senator Sends Letter to Fed Chair Urging Tapering

Senator Joe Manchin [Photo by AP Yonhap News]

[Asia Economy Reporter Byunghee Park] U.S. Senator Joe Manchin of the Democratic Party sent a letter to Jerome Powell, chairman of the Federal Reserve (Fed), the central bank, urging the tapering of asset purchases.

According to CNBC on the 5th (local time), Senator Manchin demanded tapering, stating that the Fed's monetary policy for economic stimulus is causing overheating of the economy and increasing inflation concerns.

The Fed has been implementing a quantitative easing policy, purchasing $120 billion in assets monthly along with a zero interest rate policy to counter the risk of economic slowdown due to COVID-19. Senator Manchin demanded a reduction in the $120 billion purchase scale.

Manchin is considered the most conservative figure among Democratic senators. He has consistently expressed opposition to the large-scale economic stimulus bills introduced after President Joe Biden took office, citing concerns over increasing federal deficits and potential inflationary pressures.

As the U.S. economy rapidly recovers from the COVID-19 crisis, calls for tightening the Fed's monetary policy are growing louder. Debates over monetary policy tightening are intensifying even within the Fed.

Fed Governor Christopher Waller said in an interview with CNBC on the 2nd that if job growth exceeds 800,000 in August and September, the Fed could announce a tapering plan in September and begin actual tapering from October.

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