Bloomberg (Link) - Rainer Buergin & Rebecca Christie (October 23, 2010)
The Federal Reserve’s push toward easier monetary policy is the “wrong way” to stimulate growth and may amount to a manipulation of the dollar, German Economy Minister Rainer Bruederle said.
Fed Chairman Ben S. Bernanke yesterday gave Group of 20 finance ministers and central bankers meeting in Gyeongju, South Korea an overview of the U.S. central bank’s efforts to jumpstart the world’s largest economy. His strategy, which investors expect will soon include greater asset purchases, drew criticism at the talks, said Bruederle.
“It’s the wrong way to try to prevent or solve problems by adding more liquidity,” Bruederle told reporters yesterday, saying that emerging-market officials were among the critics. Bruederle, a member of the Free Democratic Party, the junior partner in Chancellor Angela Merkel’s government, stepped in for hospitalized Finance Minister Wolfgang Schaeuble at the meeting.
The debate over the Fed’s strategy comes as the G-20’s advanced nations sought to alleviate concerns over big swings in capital flows to emerging markets by promising to be “vigilant against excess volatility” in exchange rates. The U.S. central bank completed purchases of about $1.7 trillion of debt in March to support the recovery. The policy-setting Federal Open Market Committee next meets Nov. 2-3.