Romney Supports Fed Audit; Has the Likelihood of QE3 Changed?
Mitt Romney, when asked on Monday at a town hall meeting in New Hampshire if he supports an audit of the Federal Reserve, responded that “The answer is yes to that, very simple, the answer is yes.”
The Republican presidential candidate added that “The Federal Reserve should be accountable. We should see what they’re doing.”
Romney’s comment marked his first public criticism of the U.S. central bank, which has previously said that an audit would weaken the Fed’s independence. Furthermore, a Bloomberg article noted that “Under pressure from anti-tax Tea Party activists and other small government advocates, Republicans are considering including a plank in their platform calling for a full audit of the central bank — a prospect that concerns many party leaders and their financial supporters. Romney’s remarks could put pressure on the Republican Platform Committee — which is currently meeting in Tampa, the convention site — to adopt the proposal.”
Despite the rising support for a Fed audit, Ben Bernanke and his fellow central bankers are still seriously considering implementing a third round of quantitative easing (QE3) in the near future – according to James Bianco, head of Bianco Research and a long-time Fed observer.
Bianco discussed a recent piece by John Hilsenrath of the Wall Street Journal, which noted that “The Federal Reserve’s ‘hawks’ are speaking out against additional action by the central bank to spur the economy. The Fed has moved despite this group’s opposition before. Thus, the comments now don’t represent a signal from the central bank that it is backing away from its statement earlier this month that it might act.”
In response to Hilsenrath’s article, Bianco wrote that “Jon ‘Fed Wire’ Hilsenrath spoke again yesterday…Statements by the hawks like Fisher and Plosser do not represent a change in Federal Reserve policy. So, treat them like the crazy uncles at the family get-together and understand the rest of the family (FOMC) is still on board for more QE.”
Bianco went on to say that “Hilsenrath publishes two types of stories. One type is the general news story about the economy or an explanation of FOMC policy. The other type typically carries a message directly from the Federal Reserve. The highlighted passage above suggests this is the latter. We do not believe Hilsenrath has gone rogue and writing this without Bernanke’s knowledge. We believe he was prompted to write this story after a conversation with someone at the Federal Reserve.”
2012-08-20 13:50:50
Source: http://www.goldalert.com/2012/08/romney-supports-fed-audit-has-the-likelihood-of-qe3-changed/
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