Sen. Joe Manchin (D-WV) leaves a meeting of bipartisan Senators in the office of Sen. Kyrsten Sinema (D-AZ) on Capitol Hill June 22, 2021 in Washington, DC.
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Sen. Joe Manchin, D-W.Va., said Thursday that he is “deeply concerned” about the Federal Reserve’s continued efforts to support the U.S. economy and urged the central bank to taper its emergency stimulus efforts.
“With the recession over and our strong economic recovery well underway, I am increasingly alarmed that the Fed continues to inject record amounts of stimulus into our economy,” the conservative Democrat wrote in a letter to Fed Chairman Jerome Powell.
Manchin said he is worried that further stimulus from the Fed, combined with trillions in Democratic-led spending, “will lead to our economy overheating and to unavoidable inflation taxes that hard working Americans cannot afford.”
Manchin has emerged as a key figure in his party’s efforts to pass an ambitious legislative agenda backed by President Joe Biden.
The West Virginian’s letter came as the Senate debated amendments for the $1 trillion bipartisan infrastructure bill, which could pass the chamber within days.
Democrats, meanwhile, are drafting a separate $3.5 trillion reconciliation bill aimed at addressing climate change, supporting U.S. workers and other priorities. Manchin’s vote is necessary for Democrats, as they will need all 50 members of their caucus to agree to pass the reconciliation bill, with Vice President Kamala Harris providing the tie-breaking vote.
Representatives for Senate Major Leader Chuck Schumer, D-N.Y., and the Fed did not immediately respond to CNBC’s requests for comment.
The Federal Reserve slashed interest rates and began buying billions in Treasury securities in March 2020 to ensure easy access to capital as the Covid-19 virus forced thousands of U.S. businesses to close.
Economists and politicians alike credit those measures with easing the pandemic recession and fostering a faster rebound.
Some Fed officials, including Vice Chair Richard Clarida, have begun to signal that it’s nearly time for the central bank to curb those emergency measures as the economy, and inflation, bounce back.
Powell’s term expires in February, although he is considered to have a good shot at retaining his job. Manchin is not on the Senate Banking Committee, which will play a key role in determining the next Fed chair.
