McHenry to Chair Powell: Fed Independence Remains at Risk. And Unfortunately, the Calls are Coming from Inside the Building
Washington,
July 10, 2024 -
Today, the House Financial Services Committee is holding its semi-annual hearing with Federal Reserve Chairman Jerome Powell. As Democrat-induced inflation continues to crush American families, Republicans are urging Chair Powell to reject politicization at the Fed through disastrous proposals like Basel III Endgame.
Watch Chairman McHenry’s opening remarks here.
Read Chairman McHenry’s opening remarks as prepared for delivery:
“Thank you, Chairman Powell, for being here today.
“With prices increasing more than 20 percent since President Biden took office, inflation remains top of mind for American families.
“In fact, only a quarter of Americans describe current economic conditions as ‘good’ or ‘excellent’ according to the most recent data from Gallup’s economic confidence index.
“Despite President Biden’s gaslighting, inflation was not nine percent when he took office. Out-of-control inflation was not something this Administration inherited.
“The nearly $2 trillion partisan and fiscally reckless spending in the American Rescue Plan poured fuel on a smoldering inflationary fire.
“After a delayed response to runaway inflation, the FOMC has acted with a historic pace of interest rate hikes to ease the pain caused by Democrats’ failed economic policies.
“But so far this year, inflation has been more persistent than many, including the Fed, previously expected. There is still work to be done to reach the Fed’s two percent target.
“As I’ve repeatedly said, your commitment to the Fed’s independence is critical.
“Just as you did during the previous administration, you must not allow politics to cloud the Fed’s monetary policy.
“However, despite your best efforts, Fed independence remains at risk. And unfortunately, the calls are coming from inside the building.
“Under Vice Chair Barr, the Fed’s regulatory and supervisory agenda has become politicized.
“Most notably, the development of the Basel III Endgame proposal has been a mess. This process has been cloaked in opaque standards and timelines set at meetings of unaccountable global governance bodies.
“The Fed has promised to process 410 almost universally negative public comments regarding the unjustified and under-analyzed initial proposal.
“Recent press reports—which seem to be the only way Congress gets details on Basel III Endgame progress—and your comments yesterday indicate the Fed will finally conduct a long-overdue quantitative impact study. If true, this is a promising development.
“Chair Powell, the last time you testified before this Committee, you stated the initial Basel III Endgame proposal will undergo ‘broad and material changes.’
“Yesterday in the Senate, you said the Board supports reissuing the updated proposal for public comment.
“I’m concerned that press reports also claim the Fed will tuck any changes to the proposal into this quantitative impact study. That study, including the substantial changes to the proposal, would then be issued for public feedback with a relatively paltry comment period.
“I will reiterate to you here what I’ve said to you in private: broad and material changes to the Basel III Endgame necessitate a full re-proposal. Full stop.
“Failure to do so will result in an immediate Congressional Review Act vote.
“I’ll close with this. Your steady, capable, and apolitical leadership at the Federal Reserve has shepherded our economy through extreme uncertainty.
“We now find ourselves in the midst of a new type of uncertainty surrounding the leadership of our nation.
“Doubts, fear, and panic often lead to bad decision making and even worse policy.
“I urge you to reject outside political pressure in this volatile time and stay the course for the good of the American people and our economy as a whole.”
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