Hensarling: Fed needs more accountability, transparency

by Ryan Smith15 Dec 2016
The chairman of the House Financial Services Committee is calling for more transparency from the Federal Reserve.

The Fed, as expected, raised its benchmark interest rate yesterday. But although the move was widely expected, Rep. Jeb Hensarling (R-Texas) said the agency’s decisions needed to be more predictable.

“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,” Hensarling said.

Hensarling said that under the Financial CHOICE Act – the Republican alternative to Dodd-Frank – the Fed would be required to be more transparent about its decision-making process.

“While today’s rate hike was expected, what remains unclear is what comes next?” Hensarling said. “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.”

Fed Chair Janet Yellen opposes the reforms, but according to Hensarling, 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,” Hensarling said. “Requiring the Federal Reserve to be more accountable for its actions and to operate with more transparency is certainly not asking too much.”
 

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COMMENTS

  • by NoSpin JustFacts | 12/15/2016 10:49:38 PM

    I believe Representative Hensarling is making a mistake to ask the Federal Reserve to place stakes in the ground that may need to be adjusted based upon all the various factors impacting the economy. 2 often Washington DC politicians have no concept of the real world as is reflected in the huge deficits and programs that do not have the impact on our society that were allegedly intended.

    The Fed has been transparent in their inflation and unemployment targets. They certainly have learned the unemployment targets are no longer valuable when the Federal Government chases so many jobs away that we now sit an a historically low labor participation rate. Unemployment is no indicator of employment.

    I do not believe Representative Hensarling has provided any evidence of the Federal Reserve's actions being out of the blue causing a shock to our economy.

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