A group of leading economic thinkers has issued a call for the Federal Reserve to discontinue its controversial second round of quantitative easing, citing fears of inflation and the further weakening of the US dollar.
In an open letter published in the Wall Street Journal, more than twenty signatories said the central bank's large scale asset purchase plan is neither "necessary or advisable under current circumstances."
Earlier this month, the Fed pledged to purchase an additional $600 billion in assets though the first half of 2011, hoping to stoke healthy levels of inflation and speed up the recovery from the worst recession in generations.
"We disagree with the view that inflation needs to be pushed higher, and worry that another round of asset purchases, with interest rates still near zero over a year into the recovery, will distort financial markets and greatly complicate future Fed efforts to normalize monetary policy," said the letter signed by the likes of Bill Kristol of the Weekly Standard and Dick Bove from Rochdale Securities.
Also signing the letter were noted economist John Taylor of Stanford, former government officials David Malpass and John Cogan, as well as billionaire hedge fund manager Jim Chanos.
The Fed responded with a statement insisting that QE2 is in line with the central bank's Congressionally-mandated objectives to help promote both increased employment and price stability.
The central bank said it is "committed to both parts of its dual mandate and will take all measures to keep inflation low and stable as well as promote growth in employment. In particular, the Fed has made all necessary preparations and is confident that it has the tools to unwind these policies at the appropriate time."
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.