Yellen defends Fed’s independence at hearing

Republicans seeking numeric formula on rates, audits by GAO.

Federal Reserve Chair Janet Yellen defended the central bank’s independence Wednesday from Republican lawmakers who are pushing for changes in how the central bank operates and how regulators oversee the nation’s banking system.

During a hearing that stretched over four hours, GOP lawmakers challenged Yellen’s handling of the economy and her leadership in implementing the 2010 DoddFrank Act, a measure that President Donald Trump and Republicans have vowed to overhaul.

Republicans told Yellen that she should realize that changes are underway with the GOP in control of the White House and both the House and Senate.

“After eight years there is zero evidence that zero interest rates and a bloated Fed balance sheet lead to a healthy economy,” House Financial Services Chairman Jeb Hensarling, R-Texas, told Yellen. “Clearly, American have a newfound expectation that our economy will grow healthier with different policies coming out of Washington.”

Hensarling indicated that he would be pushing his legislation to limit the Fed’s independence by requiring the central bank to follow a numerical formula for setting interest rates and subject the Fed’s interest rate decisions to audit by the Government Accountability Office, the auditing arm of Congress.

Yellen told the panel she