Rep. Randy Neugebauer (R-Texas) said last week that he hopes the end of quantitative easing (QE) signals a shift to a more rules-based monetary policy that will benefit Americans and lead to long-term prosperity.
The Federal Open Market Committee announced the end of the QE policy on Wednesday.
For six years, covering three separate QE rounds, the Federal Reserve pumped $3.5 trillion into the U.S. economy by purchasing assets to keep interest rates low and encourage investment. The main objective of the policy was to help bring down an unemployment rate that was at 10 percent in October 2009 and fell steadily to 5.9 percent last month.
Neugebauer, the chairman of the House Financial Services Committee’s Subcommittee on Housing and Insurance, doesn’t believe that will be the program’s lasting legacy.
“While the Fed’s unprecedented balance sheet busting experiment into another round of QE has artificially created winners in the equity market, I’m afraid the long-term legacy of the policy will reflect the harm it has done to our nation’s seniors, savers and all Americans faced with greater uncertainty and the possibility of a QE-induced bubble,” he said.
Neugebauer believes the policy only made it easier for the federal government to add trillions of dollars to the U.S. national debt while creating precarious conditions in the corporate debt and high yield markets.