(Bloomberg) -- Senator Joe Manchin, the West Virginia Democrat, urged Federal Reserve Chair Jerome Powell to start pulling back on its $120 billion in monthly bond purchases aimed at providing stimulus to the economy by lowering borrowing costs.
“I am deeply concerned that the continuing stimulus put forth by the Fed, and proposal for additional fiscal stimulus, will lead to our economy overheating and to unavoidable inflation taxes that hard working Americans cannot afford,” Manchin wrote in a letter made public on Thursday.
“I urge you and the other members of the Federal Open Market Committee to immediately reassess our nation's stance of monetary policy and begin to taper your emergency stimulus response,” he wrote.
Fed officials are in discussions on how to taper back their monthly purchases as the U.S. economic recovery gains momentum and inflation risks shift to the upside, though they have yet to say when that process will begin and what the pace will be.
The Fed's preferred inflation measure has been above its 2% target for four consecutive months. Officials say price increases as the economy reopens will prove to be largely transitory, but they worry that some of the pricing power companies have will stick.
Manchin is a moderate whose vote will be crucial to Democrats seeking to pass trillions of dollars in long-term spending this fall.
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