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Tags: Romney | Fed | Stimulus | Economy

Romney: More Fed Stimulus Won't Help Economy

Sunday, 05 August 2012 12:51 PM EDT

Republican presidential candidate Mitt Romney said on Sunday that a fresh round of monetary stimulus from the Federal Reserve would not help the fragile U.S. economy.

A stream of disappointing economic reports has underpinned expectations that the U.S. central bank will do more to stimulate growth with a third round of billions of dollars of bond purchases, also known as quantitative easing, or QE3.

"I am sure the Fed is watching, will try to encourage the economy, but I don't think a massive new QE3 is going to help this economy," Romney said in an interview with CNN's "State of the Union" television program aired on Sunday.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

"The Fed's first action, quantitative easing, was effective to a certain degree. But I believe that the QE2, the second round of easing, I don't think it had the impact that they were hoping for," he said.

Romney, who has been stressing his business acumen and years as Massachusetts governor as experiences he would employ to help heal the economy, has vowed to create 12 million jobs in his first four years as president were he to beat Democratic President Barack Obama in the November election.

The unemployment rate ticked up to 8.3 percent in July, the government's latest jobs data showed last week, prompting Romney to tear into Obama's handling of the economy, a key election issue.

On Wednesday, the Fed signaled that more bond buying could be on the way if the recovery does not pick up - a move that could unleash fresh attacks on the central bank.

Many prominent members of the Republican Party have strongly opposed the Fed's unconventional policy measures to sustain the recovery from the 2007-2009 economic crisis, accusing the central bank of going beyond its mandate and saying that new monetary stimulus could fuel inflation.

Foreign governments have also attacked the Fed's previous two stimulus programs, saying they artificially weakened the U.S. dollar and hurt their exports.

In addition to pumping more money into the economy, the Fed has tried to push down long-term borrowing costs with its "Operation Twist" program of replacing short-term debt it holds with longer-term securities.

Democratic National Committee Chairwoman Debbie Wasserman Schultz said on Sunday it was up to the Fed to decide whether the economy needed more stimulus, not Romney or the White House.

"The Federal Reserve is an independent financial institution," she said on ABC's "This Week" television program.

"It's important that we not dictate from the White House, or certainly from candidates for president of the United States, what the Federal Reserve should be doing," she said.

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

© 2023 Thomson/Reuters. All rights reserved.

Sunday, 05 August 2012 12:51 PM
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