Fed Action Gets Unexpected Endorsement from India

Source:

"Support could help deflect criticism of U.S. economic policies at the G-20 summit."

When the Federal Reserve announced last week that it would buy $600 billion in U.S. Treasury bonds to help the economy, it quickly came under attack from German, Brazilian and Chinese officials, who said the United States was trying to depreciate the dollar.

On Monday, the plans earned a hearty endorsement from President Barack Obama in his first public comment on the Fed action, and support also came from an unexpected source—India.

Looking ahead to the Group of 20 meeting, Mr. Obama made the comments at a joint news conference here with Prime Minister Manmohan Singh, who backed the Federal Reserve's position.

Mr. Singh, an economist by training, offered a rare foreign endorsement of the Fed's plan to buy $600 billion in Treasury bonds, which has mostly attracted criticism from other countries. His support could help the United States deflect criticism of Washington's economic policies at the G-20 summit meeting in Seoul this week.

"A strong, robust, fast-growing United States is in the interests of the world," Mr. Singh said. "And therefore anything that would stimulate the underlying growth and policies of entrepreneurship in the United States would help the cause of global prosperity."

The two leaders' comments came on the third day of a 10-day Asia trip for Mr. Obama—a journey being characterized as an economic mission.

At the G-20 meeting, Obama intends to press other countries to embrace a nonbinding target to limit their current account surpluses and deficits to no more than 4%. The administration also is expected to press the International Monetary Fund to take a greater role in monitoring trade patterns and intervening on exchange-rate disputes.

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe