Press Releases

Today, the House Committee on Financial Services, led by Chairman French Hill (AR-02), welcomed Federal Reserve Board Chairman Kevin Warsh for a hearing on his views on the future path of the economy, the Federal Reserve’s monetary policy functions, and efforts to achieve price stability and ensure the Federal Reserve remains focused on its core mission.

On Restoring Price Stability and Economic Confidence:

Chairman Hill said, “... [I]nflation is the result of many factors. The Fed has control only over one: monetary policy, as expressed through its interest rate and balance sheet policy. Today, a potential second surge of inflation is appearing due to factors outside the Fed's control. What the Fed can control is how it reacts. Though upward pressure on prices may diminish on its own, it's not a sure thing. The Fed may be able to look through these inflationary pressures, but the Fed has believed that before and has been wrong. High inflation affects Americans in the here and now, not in some hypothetical future composed of long-term projections or of inflation expectations.”

In June, Chairman Hill published an op-ed in the National Review, outlining the Price Stability Act, which would replace the Federal Reserve’s dual mandate with a single mandate focused on maintaining price stability.

Committee Vice Chairman Bill Huizenga (MI-04) said, “In late 2021 and 2022, as has been referenced by a few others, the Fed had recognized inflation was not transitory. I'm reminded of actually a hearing we had where we had then-Secretary Yellen, former Fed Chair Yellen, sitting next to the then-current Fed Chairman, and when I brought up the question about whether it was transitory, they did not have the same answer. And it was interesting seeing how that lag sort of played into the fear that many of us had, that there had been more to this foot-dragging coming out of the Biden administration.”

On the Federal Reserve’s path forward:

Subcommittee on Financial Institutions Chairman Andy Barr (KY-06) questioned Federal Reserve Chairman Warsh on how he is different from past Chairmen, to which Chairman Warsh answered, "We've made a lot of progress in six weeks, but I think it's important to use this opportunity wisely. The sixty-three months of inflation above target have been an unfair burden and a tax on the American people and businesses. We plan on getting rid of that tax. If that means we need a regime change in policy, and we need new consideration of practices, some of which have been working, some of which haven't, that's what we aim to do."

Rep. William Timmons (SC-04) said, "The Federal Reserve has an important responsibility to carry out the mission Congress assigned to it. Maintaining public confidence depends not only on sound economic policy but also on staying within the statutory mandate. In recent years, many Americans question whether the Federal Reserve has moved beyond that mission through actions involving climate-related financial regulation, digital assets, and reputational risk. I appreciate the steps that have been taken to refocus the institution on its core responsibilities. Looking ahead, it is important to ensure that the Federal Reserve remains focused on the responsibilities Congress has given it."

On the Federal Reserve’s priorities, Chairman Warsh said, “The Fed’s number one objective is to get monetary policy right—or as near to it as we possibly can. That is our clear and constant aim, the star we steer by. And if we get policy right—and we will—the inflation surge of the last five years will be a thing of the past. …I recognize that high inflation has been an undue burden on American households and businesses. While monthly price fluctuations are inevitable—especially in an unsettled world—underlying inflation over longer time horizons is determined largely by monetary policy.”

On Preserving the Strength Our Markets :

Subcommittee on Capital Markets Chairman Ann Wagner (MO-02) said, “Under the previous Administration, we saw a heavy-handed regulatory approach that aimed to strip risk out of our markets entirely. And time after time, the Biden-Harris administration pushed policies that limited financial freedom and stifled growth. Our capital markets are, as we all know, the envy of the world, and that is because we allow Americans to weigh risk and reward for themselves and make the financial decisions that are best for them and their families.”

House Committee on Small Businesses Chairman Roger Williams (TX-25) said, “America's banking system is the engine of prosperity in this country, and it plays a critical role in creating opportunities. From the community banks that serve small towns and main street businesses to the larger institutions that support our capital markets, access to credit is essential for families, entrepreneurs, and job creators. And as a businessman who has owned and operated a small business for 57 years, I know firsthand how important it is to have a banking system that is both safe and accessible. The American public and the American people expect a chance to pursue their American dream, and access to affordable credit is often what makes that possible.”

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