The Federal Reserve signaled confidence in the U.S. economy and relieved a few GOP lawmakers Wednesday when it announced it will stop purchasing bonds to stimulate the economy.
Since the 2008 financial crisis, the Fed has kept interest rates at or near zero percent by purchasing bonds in an effort to reduce unemployment and get the economy back on track. It’s deemed the policy of quantitative easing a success, and decided to end the program by November — a vote of confidence in the economy —reported The Wall Street Journal.
Texas Republican Rep. Kevin Brady, chairman of the Congressional Joint Economic Committee, said in a statement ending the unusual policy is the right decision. “Delaying the normalization of monetary policy offers few benefits and poses significant risks to the American economy,” he said in a statement, but added it must be done carefully, in an “orderly and predictable” manner.
Some lawmakers acknowledge the unusual policy may have been necessary for a short time following the crisis, but has now created another bubble by artificially propping up the market for too long.