Today, Rep. Mike Pence (R., Ind.) introduced legislation that would limit the mission of the Fed to controlling inflation. The legislation comes as a response to the Fed’s latest round of quantitative easing, which many fear will spur inflation. Pence issued the following statement on the legislation:
“Since 1977 the Fed has been forced to develop monetary policy that balances concerns for employment and inflation. The bill I’m introducing today will end that dual mandate and put the Fed back in the business of solely focusing on price stability and preventing inflation.
“The Fed’s QE2 decision earlier this month to print $600 billion, as an attempt to reduce unemployment, is another example of the failure of its dual mandate. By using monetary stimulus in this way, the central bank has actually taken steps that will prove inflationary in the long run. Printing money is no substitute for sound fiscal policy.
“The Federal Reserve should focus solely on controlling inflation. Unemployment is a matter of great seriousness to the American people, but it is the job of the Congress and the President to put forth pro-growth policies on taxes, to rein in government spending, and to reduce the regulatory burden in order to create an environment that is friendly to our nation’s job creators and that sustains long-term employment. The Fed’s full employment mandate has, too often, led to short-term fixes with long-term inflationary consequences that will not lead to job creation. It’s time to return the Federal Reserve to the singular mission of protecting the fundamental strength and integrity of the dollar.”