Rep. Jeb Hensarling (R-Texas), the chairman of the House Financial Services Committee, asked Federal Reserve Chairman Ben Bernanke on Wednesday to “engage in…a ruthless examination” of the Fed’s quantitative easing exist strategy.
“Based upon the economy’s performance since the Federal Reserve embarked upon its unprecedented campaign of monetary stimulus, many economists have observed, and I would tend to agree, that it is fair to conclude that rarely has so much been spent in pursuit of so little and rarely has so much been risked in return for so little,” Hensarling said. “The extraordinary measures of 2008 have become the ordinary, albeit unsustainable, measures of 2013 and beyond. Again, as recent events demonstrate, it remains very much an open question whether the Fed can orchestrate an orderly withdrawal of monetary stimulus.”
In his semiannual testimony before Congress, Bernanke said that the Fed’s $85-billion-per-month asset purchase strategy is “by no means on a preset course,” adding that the Federal Open Market Committee will “respond to data” as it becomes available, Bloomberg reports.
Bernanke said last month that the central bank could taper bond purchases later this year and eliminate the stimulus by the middle of next year if the economy meets forecasted growth of 2.3 percent to 2.6 percent.
“If the data are stronger than we expect, we’ll move more quickly [to taper asset purchases],” Bernanke said, according to Bloomberg. “[If the data] don’t meet the kinds of expectations we have about where the economy’s going, then we would delay that process or potentially increase purchases for a time.”