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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The chairman of the House Financial Services Committee is calling for more transparency from the Federal Reserve.