Tags: Yellen | Fed | Congress | audit

GOP Lawmakers Push for Expanded Audits of Federal Reserve

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Wednesday, 12 Jul 2017 02:31 PM

The Latest on Federal Reserve Chair Janet Yellen's testimony to the House Financial Services Committee (all times local):

12:10 p.m.

Federal Reserve Chair Janet Yellen's appearance before the House Financial Services Committee allowed Republicans to promote one of their favorite goals — requiring the central bank to undergo audits by the Government Accountability Office, the oversight arm of Congress.

Republicans for years have pushed legislation that would impose audit requirements on all parts of the Fed's operations, including its decisions on interest rates.

Yellen, however, did not budge in her strong opposition to allowing the GAO to audit the Fed's monetary policy decisions. She noted that the GAO already has the power to audit other areas of Fed operations outside of interest rate decisions. But she said including monetary policy could seriously impinge on the Fed's political independence.

Fed officials, who meet eight times a year behind closed doors to make decisions on interest rates, need "a space where it can have honest deliberations" without having the threat of political interference, Yellen said.

11:30 a.m.

Republican critics have sparred with Federal Reserve Chair Janet Yellen over a number of issues, from the Fed's low-interest rate policies to the Fed's efforts to implement the 2010 Dodd-Frank Act to impose tighter restrictions on banks. They did not pass up the chance to do so again at what could be Yellen's last appearance before the House Financial Services Committee.

Rep. Blaine Luetkemeyer, R-Missouri, pressed Yellen to pledge that the Fed would not put into effect any further regulations governing banks until the Senate has confirmed Randal Quarles, who was nominated on Monday by President Donald Trump to take the position of Fed vice chairman for bank supervision.

In response, Yellen said that the Fed currently had a "relatively light regulatory agenda" but she did not pledge to delay pending regulations until Quarles is confirmed. She did say the Fed would carefully consider the issue of regulatory burden in implementing any new rules and also looked forward to the input that will be offered by Quarles when he joins the seven-member Fed board, which currently has three vacancies.

10:50 a.m.

Federal Reserve Chair Janet Yellen says she "absolutely" intends to serve out her four-year term as head of the central bank but she hasn't given thought to whether she would accept a second term if President Donald Trump asked her to do so.

Rep. Carolyn Maloney, D-New York, noted that all three of Yellen's recent predecessors, Paul Volcker, Alan Greenspan and Ben Bernanke, were first nominated by a president of one party and re-nominated by a president of another party.

"There is a long history of presidents re-nominating Fed chairs that their predecessors originally named," she said, asking Yellen if she was "open to serving another four years" if asked to do so by Trump.

Yellen, as she has done in the past, chose to dodge the question.

While declaring her intention to serve out her current term, which ends in early February, she said, "I haven't given further thought" to the question of serving for another four years.

10:15 a.m.

Federal Reserve Chair Janet Yellen has begun her testimony before the House Financial Services Committee. It is the first of two days of appearances. On Thursday, she will testify before the Senate Banking Committee.

She says that the central bank expects to keep raising a key interest rate at a gradual pace and also plans to start trimming its massive bond holdings this year as long as the economy keeps performing as expected.

Her testimony offered few clues on the timing of the next rate hike, although many analysts believe it could occur in September.

Paul Ashworth, chief economist at Capital Economics, says it makes sense for Yellen to keep her options open, giving the Fed time to assess more economic data before making its next move.

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Economy
Federal Reserve Chair Janet Yellen's appearance before the House Financial Services Committee allowed Republicans to promote one of their favorite goals — requiring the central bank to undergo audits by the Government Accountability Office, the oversight arm of Congress.
Yellen, Fed, Congress, audit
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2017-31-12
Wednesday, 12 Jul 2017 02:31 PM
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