WASHINGTON — Republican leaders of the House and Senate are urging Federal Reserve policymakers against taking further steps to lower interest rates.

On the eve of the Fed’s two-day policy meeting, the leaders sent a letter to Fed Chairman Ben Bernanke warning that the Fed’s policies could harm an already-weak U.S. economy.

The letter, sent Monday, was signed by Senate Republican Leader Mitch McConnell of Kentucky, Sen. Jon Kyl of Arizona, House Speaker John Boehner of Ohio and House Majority Leader Eric Cantor of Virginia.

The letter followed criticism from several Republican presidential candidates that the Fed efforts to boost growth are raising the risk of inflation.

“The American people have reason to be skeptical of the Federal Reserve vastly increasing its role in the economy,” the lawmakers wrote.

It is rare for lawmakers to try and sway policy action at the Fed, which operates independently of Congress and the White House. It was also sent at a time when Bernanke, a Republican, has faced growing criticism from his own party.

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Former Fed official Joseph Gagnon, senior fellow at the Peterson Institute for International Economics, called the letter “outrageous’ and “incredible.” He said it’s been several decades since such high-level politicians tried so directly to influence the Fed.

“The fact that it’s in print and signed by the leaders of the House and minority leaders of the Senate raises it up a notch,” Gagnon said.

Republicans have been critical of the Fed’s previous efforts to lower rates through the purchase of Treasury bonds.

The letter expressed serious concerns that the Fed’s actions could weaken the value of the dollar or encourage excess borrowing by consumers who are already carrying too much debt.

 


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