September 21, 2011 / 2:37 PM / 6 years ago

Republicans don't want loose monetary policy

WASHINGTON (Reuters) - Many Republicans fear a loose monetary policy will hurt the U.S. economy, a Republican leader said on Wednesday after telling the Federal Reserve to refrain from further stimulus.

“Many of us feel that some of the very loose monetary policy has had a negative effect as far as global confidence in our currency and ultimately in our economy,” said Representative Eric Cantor, the No. 2 Republican in the House of Representatives.

The Federal Reserve is expected to launch a fresh effort to invigorate the faltering U.S. economic recovery at its Wednesday meeting.

In a letter released ahead of the meeting, Cantor and other top congressional Republicans took the unusual step of urging the Fed to refrain from further “intervention” in the economy.

The group said the Fed’s policies have been ineffective at supporting economic expansion and boosting employment.

“We’re trying to maintain a sense of fiscal discipline in the kind of policies and legislation that we’re pressing and want to see the administration join us in a strong dollar policy, a sensible regulatory policy and a pro-growth tax policy,” Cantor said at a news conference.

A top Democrat said the letter is just the latest move by Republicans to prevent the government from trying to boost the economy.

“Time and again, when either the Federal Reserve board or the president or in fact any economist suggests we need move forward as a nation to deal with the recession, the answer from the Republican side of the aisle is no,” Assistant Senate Democratic Leader Dick Durbin said on the Senate floor.

Reporting by Richard Cowan and Andy Sullivan; editing by Bill Trott

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