Mitt Romney told CNN’s State of the Union that he was opposed to any more quantitative easing in an interview that aired on Sunday. ”I am sure the Fed is watching and will try to encourage the economy,” he said. “But I don’t think a massive new QE3 will help the economy.” QE stands for quantitative easing, a type of monetary policy that the Federal Reserve has already attempted twice recently—hence, any third attempt would be labeled QE3.
Quantitative easing is the name for a type of policy in which a central bank buys back some of its government’s own bonds in order to inject a certain amount of money into the economy. Conservative critics opposed the last two rounds of quantitative easing on the grounds that it would lead to inflation, but some Keynesian economists, such as Paul Krugman, say that the real problem with the policy was that there wasn’t enough of it. “$600 billion really isn’t a lot when you’re trying to move a $15 trillion economy,” Krugman wrote in November 2010, regarding QE2.
On Sunday’s This Week, Democratic National Committee Chair Debbie Wasserman Schultz shied away from urging any specific course of action for the Federal Reserve. She did, however, make a subtle dig at Romney for his remarks.
“It’s important that we not dictate from the White House, or certainly from a candidate for president of the United States, what the Federal Reserve should be doing,” she said. “That’s why they are an independent institution.”
The Federal Reserve released a statement last Wednesday indicating that for now it is unlikely to take much action in the near future, despite persistently high unemployment.