“If independence is an issue, than we really ought to examine the independence of the Fed
from the executive branch of government. That’s where the real threat is,
not from the legislative branch”
House Financial Services Committee Chairman Jeb Hensarling (R-TX) was interviewed on CNBC’s “Closing Bell” Wednesday following the committee’s hearing with Federal Reserve Chair Janet Yellen.
You can watch the entire interview by clicking on the image, and below are excerpts that may be of particular interest.
On his reaction to Chair Yellen’s testimony:
“Well, I was disappointed because what we have seen now is that middle income families are still struggling in the slowest, weakest recovery in the postwar era, and yet it seems that we will continue on extraordinary measures that were employed back in 2008 and here we are in 2015. And yet they are not more transparent, they are not more accountable, and the real issue is, economists I know believe that we are best served when the Federal Reserve will communicate to the public what their monetary policy will be, and yet we didn't hear it in this particular testimony.”
On the Federal Reserve’s independence:
“[M]any of us believe that if independence is an issue, than we really ought to examine the independence of the Fed from the executive branch of government. That’s where the real threat is, not from the legislative branch that merely has asked the Fed -- you make up monetary policy, you can waive it, you can change it, but you ought to have an obligation to communicate it to the rest of us, and when you don't, you hinder economic growth, you hinder a healthy economy, you hinder middle income America that now has smaller paychecks and a smaller bank account.”
On making the Fed more transparent and accountable:
“The House Financial Services Committee moved a bill that, again, would simply ask the Fed to reveal its policy -- it's really about transparency and accountability -- just as long as they reported it to the rest of us and to ensure that the Fed, as you know, just doesn't have to do with monetary policy, it has to do with being a prudential banking regulator. And yet they are exempt from any of the provisions like cost-benefit analysis that other prudential regulators are required to do. We moved that bill in the last Congress. I intend to move a similar bill in this Congress.”