WASHINGTON: Federal Reserve Chair Janet Yellen defended the central bank’s independence yesterday at a US congressional hearing, handling tough questions from Republican lawmakers who want to rein in the Fed’s authority.
Yellen’s prepared remarks on the economy and Fed policy were identical to those from her appearance on Tuesday before the Senate Banking Committee, where she stood by her view that an accommodative monetary policy is still needed even though the economy is recovering.
Yesterday, Yellen told the House of Representatives Financial Services Committee that she saw sufficient growth to support gains in the labor market and that credit growth and leverage were at moderate levels. She also addressed concerns raised about the Fed’s oversight of financial institutions and its use of re-purchase agreements. Republican members of the panel peppered Yellen with sharper questions than she faced during her Senate appearance, criticising the Fed for not operating with enough transparency.
Committee Chairman Jeb Hensarling of Texas asked if Yellen’s weekly discussions with the US Treasury secretary should be disclosed to the public. “I’m not willing to report, on a weekly basis, private conversations,” Yellen responded, adding, however, that any agreements that came from such discussions would be disclosed to the public.
Hensarling asked Yellen about a Republican-backed bill introduced this month that would require the Fed to conduct more cost-benefit analyses, provide transparency for Fed stress tests on banks and on international regulations, and take a more rules-based approach to monetary policy.
Reuters
