Forbes - House Republicans Grill Yellen On Fed Transparency, Liberal Ties
News Article
By Samantha Sharf
In her second day in a row of Capitol Hill testimony Federal Reserve Chair Janet Yellen participated in a hearing titled: "Monetary Policy and the State of the Economy." Wednesday she was again welcomed by suspicious hosts who offered more statements about Fed oversight and bias than questions about monetary policy or the state of the economy.
The Welcome
House Financial Services Committee Chair Jeb Hensarling, a republican from Texas, kicked off Wednesday's hearing by sharing significant doubts about the strength of the economic recovery and the effectiveness of monetary policy as well as his belief that the Fed lacks transparency and accountability. "Fed reform is coming," he told Yellen.
Another republican Bill Huizenga described the Fed as "shrouded in mystery for the American people" despite exerting substantial control over financial markets. He wants the Fed to "lift the veil of secrecy" and for Yellen to stop by the Hill for more hearings. (Currently the Fed chair is required to appear before both houses of Congress twice annually. Huizenga would like that to happen four times a year.)
On the other side of the aisle, ranking member Maxine Waters, a democrat from California, was more positive. She complemented Yellen on her role in improving economic conditions but pointing out that low, middle income and in particular black families continue to struggle. Al Green, a Democrat from Texas, responded to the Republican calls for more Fed oversight by saying, "We have to balance the transparency of the Fed with the independence of the Fed." Rhetorically asking, "Do we want the same Congress who can't fund homeland security to have control over Fed funding?"
The Statement
In her prepared remarks delivered before the Senate Committee on Banking, Housing and Urban Affairs Tuesday and then the House Committee on Wednesday, Yellen sought to provide clarity on the course of actions the central bank will take as it moves toward raising interest rates from near zero to a more historically normal range. The Fed is taking great care in this process which it hasn't gone through in a decade.
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