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Former Fed chiefs join call to keep currency rules out of trade pacts
[WASHINGTON] A group of prominent US economists, including former Federal Reserve chiefs, Alan Greenspan and Ben Bernanke, wrote to congressional leaders on Thursday to support key trade legislation but warn against including currency rules in trade deals.
The economists, all former chairs of the President's Council of Economic Advisers, said legislation to streamline the passage of trade deals through Congress "encourages our trade partners to put their best offers on the table."
But in the letter, they said rules aimed at preventing trading partners from deliberately weakening their currencies, which many lawmakers are pushing for, should be avoided.
"This is because monetary policy affects the value of currencies," said the letter, signed by 14 economists including Charles Schultze, Martin Feldstein, and Alan Krueger.
"Attempts to penalize countries for supposedly manipulating exchange rates would thus impose constraints on US monetary policy, to the detriment of all Americans."