ICYMI: Financial Services Committee Presses Fed Chair Powell on Inflation, Monetary Policy, and Fed Independence
Washington,
February 14, 2025 -
Earlier this week, the House Financial Services Committee, led by Chairman French Hill (AR-02), held a hearing with Federal Reserve Chairman Jerome Powell reviewing the Federal Reserve’s Semi-Annual Monetary Policy Report. Committee members pressed Chairman Powell on being too deferential to the statutory Vice Chair of Supervision under the Biden-Harris Administration, monetary policy, America’s long-term debt, and inflation.
View Chairman Hill’s opening statement HERE or below.
On being too deferential to the Vice Chair of Supervision:
“Over the past decade, we have witnessed too many distracting mandates diluting the Federal Reserve’s core mission of price stability. … In my estimation, over the years, you and the Board have been too deferential to the statutory Vice Chair of Supervision. During his tenure, Vice Chair for Supervision Michael Barr was given free rein to use the Fed ad a vehicle for partisan goals,” said Chairman Hill. “The Fed needs to focus on core banking risks, the duties that have been assigned to it by Congress, and adherence to the laws that Congress has passed. The Fed has a chance, right now, to get back on the right track and preserve its independence for the long-term benefit of the American People.”
On monetary policy:
“The actions of the Federal Reserve and the machinery of monetary policy play an important role in economic stability,” said Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity Chairman Frank Lucas (OK-03). “With the 5-year review of the monetary policy framework underway, I hope this will be an opportunity to evaluate the effectiveness of the Fed’s tool kit and its vast influence on the lives of every American. The creation of the new task force will afford us the opportunity to dive deeper into this topic. There are real issues that deserve our attention.”
On inflation:
Capital Markets Subcommittee Chair Ann Wagner (MO-02), asked Chair Powell what the Fed’s plan is to address inflation, “Since 2021, the average Missouri household is paying about $1,100 more per month due to inflation. … What specifically is the Federal Reserve’s plan for making like easier for everyday Americans?”
On fiscal concerns and long-term debt:
Rep. Ralph Norman (SC-05) asked Chair Powell his views on the long-term debt, stating “In 2011, Vice Chairman Yellen made a statement about the concern about the long-term debt situation and the imbalance that we have with our budget. In the 4thquarter when she made the statement, the federal debt held by the public was, as a percentage of GDP, 64.75%. Now, the same debt to GDP as identified by CBO was 99% at the end of ’24. Do you express the same concern that Ms. Yellen had about the severity of where we are with our continued long-term imbalance?
Chairman Powell: “… We’re on an unsustainable path and the debt level is unsustainable…and it’s certainly past time for Congress to work on that.”
