President Obama’s nominee to chair the Federal Reserve told the Senate Banking Committee today that she was opposed to an audit of the Fed because it would subject the central bank to “short-term pressures.”
“We’re one of the most transparent central banks in the world, but I would not support anything that diminishes the independence,” she said.
Sen. Rand Paul has proposed legislation that would subject the Federal Reserve to a full audit by the Government Accountability Office (GAO), offering Congress a look at the internal operations of the famously opaque institution. Tea partiers like Paul aren’t the only people who support an audit: the proposal has also garnered support among labor leaders such as AFL-CIO president Richard Trumka, progressive economists like Dean Baker, and Congressional liberals such as Rep. Alan Grayson, D-Fla.
Paul has threatened to block Yellen’s nomination unless his proposal for a Fed audit gets a vote in the Senate. His office did not respond to a request for comment on Yellen’s remarks.
Yellen, who currently serves as vice chair of the Federal Reserve, also indicated during the confirmation hearing that her tenure would not represent a significant break from that of outgoing chair Ben Bernanke. She defended the Fed’s policy of buying Treasury bonds as a form of economic stimulus and hinted that she would continue with policies in that vein if confirmed.
“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases. I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” she said in her opening statement.
If confirmed, Yellen would be the first female Federal Reserve chair in American history.
Ned Resnikoff is an urban policy analyst, researcher, writer, and editor. His byline has appeared in a variety of publications, including the New York Times, San Francisco Chronicle, Dissent, and The Nation. He writes the newsletter Public Comment, which can be found at publiccomment.blog.