NEW DELHI - President Barack Obama Monday defended the Federal Reserve Board's plan to print stimulus dollars to buy $600 billion of government bonds after China and Russia stepped up criticism ahead of this week's Group of 20 meeting. The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent a currency row escalating into a rush to protectionism that could imperil the global recovery. But there is little sign of consensus.
The Fed move could depress the dollar. "I will say that the Fed's mandate, my mandate, is to grow our economy. And that's not just good for the United States, that's good for the world as a whole," Obama said during a trip to India.
Meanwhile, Fed Governor Kevin Warsh said Monday in a speech in New York he is concerned the central bank's expansion of record stimulus may spark too much inflation, fail to aid growth and delay any plans to reduce U.S. indebtedness. "I am less optimistic than some that additional asset purchases will have significant, durable benefits for the real economy," Warsh said.His comments suggest his vote Wednesday to support the Fed's $600-billion Treasury purchases was reluctant.
Further concern came from Dallas Fed president Richard Fisher, who said the Fed is "monetizing" the government's debt by printing money to finance the shortfall.- Combined news services