Hensarling: Hardworking Americans Would Have More Certainty if Fed Were More Transparent
Washington,
December 14, 2016 -
WASHINGTON – House Financial Services Committee Chairman Jeb Hensarling (R-TX) comments on the Federal Reserve’s decision to raise short-term interest rates and how the Financial CHOICE Act would improve the conduct of monetary policy:
“Sustainable, market-based interest rates are better for consumers and investors, and our economy would be healthier if the Federal Reserve were more predictable in its conduct of monetary policy and more transparent about its decision-making. While today’s rate hike was expected, what remains unclear is what comes next? If Fed reforms that are part of the Financial CHOICE Act were to become law, hardworking Americans would have more certainty about what comes next so they could better plan for their future. Instead of having to wait for news like today’s, households and businesses could more consistently and fully enjoy the benefits of their good work.
“By promoting a more predictable, rules-based monetary policy, the Financial CHOICE Act provides a stronger foundation for economic growth than the Fed’s improvisational approach of recent years -- the results of which have been underwhelming to say the least. Although Chair Yellen opposes these modest reforms, they are supported by a long list of leading economists, including three recent Nobel Laureates.
“While the Federal Reserve wishes to avoid greater public scrutiny of its conduct of monetary policy, that is not how open democratic societies operate. Requiring the Federal Reserve to be more accountable for its actions and to operate with more transparency is certainly not asking too much.”
Background: The Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act includes reforms sponsored by Rep. Bill Huizenga (R-MI) and passed by the House that would modernize the Federal Reserve and bring it into the 21st century.
These reforms:
- Further insulate the Fed from political pressures by protecting its independence to chart whatever monetary policy course it deems appropriate, but require the Fed to give the American people a clearer accounting of its actions.
- Help consumers and investors make better decisions in the present, and form better expectations about the future, so that goods and services (which include labor) can readily engage their most promising opportunities.
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