“The bill would severely impair the Federal Reserve’s ability to carry out its congressional mandate and would be a grave mistake, detrimental to the economy and the American people.”
Janet Yellen’s demands that we don’t politicize monetary policy.
So, she responded to a bill aimed to boost transparency and accountability at the Fed, how else? By politicizing the Federal Reserve and monetary policy.
The Fed Chair opposes a law that would force the central bank to set its interest rate policy based on a mathematical rule.
Yellen says that doing so would "severely damage" the U.S. economy.
The Obama administration, which threatened to veto a bill in the House of Representatives, said the proposed law would would prevent the Federal Reserve from helping the U.S. economy.
So... after seven years, we’re now finally focused on helping the U.S. economy?
Funny that this administration and Presidential candidates are demanding more control to address the forces fueling greater income disparity (er… inequality) across this country, but they can’t -- for the life of them -- understand that since 2009 quantitative easing and other policy decisions have been primary drivers of the conditions they seek to remedy.
But there’s something else going on. There's another reason why this Fed Oversight Reform and Modernization Act is worth – at least – discussion.
Today, every single member of the Fed's Board of Governors is an Obama appointee.
As Texas Senator Phil Gramm explains in the Wall Street Journal, that was never supposed to have happened under one presidency; however, a massive decline in term-lengths has fueled concerns about the Fed’s independence and level of non-partisan thinking.
Perhaps they should advise members to complete their terms.
There are plenty of people who would like to run one of the Federal Reserve banks for the full term, and people are still scratching their heads wondering why former Goldmanite Neel Kashkari has just been appointed the head of the Minnesota Federal Reserve Bank.
About the Author
Garrett Baldwin is the Managing Editor of the Alpha Pages and the Features Editor of Modern Trader. An author and Baltimore native, he earned a BS in journalism from the Medill School at Northwestern University, an MA in Economic Policy (Security Studies) from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University. @garrettbaldwin, @moderntradermag, @TheAlphaPages, Sound off: Editorial@alphapages.com Subscribe to Modern Trader magazine.