Politics & The Federal Reserve

The Federal Reserve board swapped hundreds of billions in short term bonds for long term bonds Wednesday.

Their goal is an economic stimulus.

The move by the Federal Reserve should keep credit card rates low, and could lower mortgage rates.

The move was made to encourage buying of goods like cars and trucks and to encourage hiring.

The Fed's move validates President Obama's call for a new stimulus, and in an unprecedented attack on the independent board, Republicans slammed the move in a letter, saying:

"The board should resist further extraordinary intervention...that may promote more borrowing by over leveraged consumers...we've seen no evidence that further monetary stimulus will create jobs."

"I think many of us feel that some of the loose monetary policy has had a negative effect as far as global confidence in our currency and ultimately in our economy," said House Majority Leader Eric Cantor.

Democrats fired back.

"Time and again the philosophy of the Republicans come through: stand by, do nothing," said Illinois Senator Dick Durbin.

Even the Federal Emergency Management Agency has become a partisan issue.

As recent floods recede available cash for the agency is drying up.

Democrats want another $6 billion.

Republicans say only if those funds are cut from something else, and that is holding up agreement on the next stop funding bill.

The fight over FEMA funding, relatively small change, could threaten a shut down of government.

Like the fight over the Fed, it's more proof of gridlock.