WASHINGTON Nov 16 Two U.S. Republican
lawmakers said on Tuesday the Federal Reserve should focus
solely on inflation and ditch its "dual mandate" to promote
both price stability and full employment.
The pressure from Senator Bob Corker and Representative
Mike Pence adds to the pile of international criticism over the
central bank's plan to buy an additional $600 billion in
government bonds to try to speed up a sluggish economic
Opponents worry the program will weaken the dollar and sow
the seeds of inflation at home and abroad without doing much to
lift U.S. economic growth.
Pence said in a statement that the Fed's dual mandate
policy had "failed" and he would introduce legislation on
Tuesday to strike that provision from the Federal Reserve Act
"With no explicit plan for when or how this quantitative
easing will be withdrawn, the Federal Reserve could do more for
the American economy by focusing singularly on maintaining the
value of the dollar and protecting the purchasing power of
Americans," Pence wrote.
The European Central Bank is among central banks with a
single mandate to focus on inflation. The Bank of England must
write an explanatory letter when it misses its inflation target
by too wide of a margin, and did so earlier on Tuesday.
"Providing our central bank with a clear and explicit focus
on keeping inflation low will serve America better than the
broader mandate approach we have today," Corker said in a
Republican lawmakers, fresh off of midterm election
victories that gave them control of the House of
Representatives, have sharpened their criticism of the Fed in
recent weeks. Some members of the Republican-heavy "Tea Party"
movement have pushed for abolishing the central bank.
It was not clear whether either the House or Senate would
actually move ahead with a bill to do away with the dual
mandate. Senate Republican leader Mitch McConnell said voting
on the mandate was "just one of many issues we'll be working
with and thinking about in the coming weeks."
(Additional reporting by Richard Cowan and Mark Felsenthal;
Editing by Leslie Adler)