When the Federal Reserve announced a third round of Quantitative Easing, many local Republicans said the policy will be bad for the economy. Joining the ranks of opposition to QE3 are local banks.
“Through QE3 the Fed will purchase $40 Billion in Mortgage-Backed Securities per month,” explained Sevier County Bank Executive Vice President and Chief Operating Officer Kevin R. Mullins. “When you combine the programs the Fed has implemented since the Great Recession, that include QE1, QE2, and Operational Twist, they have all failed to lower the unemployment rate below eight percent and to spur economic growth as defined by our Gross Domestic Product.”
Mullins added he doesn’t see the role of the Federal Reserve to create jobs or economic growth.
“As far as the banking industry, this will place further pressure on our Net Interest Margins, the difference in what we earn on loans and investments less what we pay on deposits,” he said. “The only impact I see QE3 having on our local economy is higher prices paid for consumer products due to the future inflation expectations that the market fears with this new program.”... read the rest of the story by Subscribing now.