FT: Fed defends monetary easing

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A group of Republican economists have also written an open letter to Fed chairman Ben Bernanke saying that the “planned asset purchases risk currency debasement and inflation”. Separately, countries from Brazil to Germany have attacked the policy as a ploy to weaken the dollar.

Fears that the heavy opposition could prompt the Fed to stop its asset purchases short of $600bn led to heavy selling of Treasury bonds on Monday. The yield on 10-year US Treasury notes rose above 2.9 per cent, returning to the levels of early August, before the Fed’s latest round of easing was priced in.