Germany's finance minister is arguing that the Federal Reserve's move to pump money into the financial system increases uncertainty in the global economy and undermines the credibility of the U.S., according to an interview published Saturday. The Fed on Wednesday confirmed that it will buy $600 billion of long-term government bonds by mid-2011 in an attempt to further drive down rates on mortgages and other debt in the hope of getting lending higher.
Germany is focusing on cutting its budget deficit in the aftermath of the global economic crisis, and other European countries also are cutting back following this year's eurozone debt crisis. "I have great doubts as to whether it makes sense to pump unlimited money into the markets," Finance Minister Wolfgang Schaeuble, a vocal critic of the decision, was quoted as telling the weekly Der Spiegel.
"The U.S. central bank's decisions increase uncertainty in the global economy," he added, according to the report. "They complicate a sensible balance between industrial and emerging countries and they undermine the financial policy credibility of the U.S.A."
For more: The Associated Press: Report: German minister renews Fed criticism
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