Federal Reserve Chairman Janet Yellen fielded a variety of questions, some of them hostile, while appearing before Congress Wednesday to present the Fed's semiannual Monetary Policy Report. However, she maintained a studied, noncommittal attitude in response to the question of when the Fed might raise interest rates.
“If the economy evolves as we expect, economic conditions likely would make it appropriate at some point this year to raise the federal funds rate target, thereby beginning to normalize the stance of monetary policy,” Yellen said in her statement before the House Financial Services Committee. “Indeed, most participants in June projected that an increase in the federal funds target range would likely become appropriate before year-end. But let me emphasize again that these are projections based on the anticipated path of the economy, not statements of intent to raise rates at any particular time.”
Yellen faced representatives who returned to the interest rate question in different forms throughout the hearing, but she steadfastly declined to make a prediction on when or whether interest rates would rise.
She also faced questions focused on whether and by how much the federal regulatory burden on financial institutions had increased because of the Dodd-Frank Act.
Yellen acknowledged at several points that the regulatory burden on financial institutions had increased, but said overall, the U.S. has a stronger and safer financial system that is better equipped to handle future economic stress.
Yellen also endured a hostile interrogation from Rep. Sean Duffy, (R-Wis.) in regard to an October 2012 leak of a Fed bond-buying plan. During the height of his questions, Duffy leaned over the committee bench to demand Yellen turn over documents the committee had subpoenaed, and charged Yellen and the Fed with deliberately failing to cooperate with the subpoena to turn over the documents.
“What is your legal authority that allows you not to comply with a congressional subpoena?” Duffy asked Yellen several times, interrupting her.
Yellen replied the Fed has not provided the documents because its inspector general had launched an investigation into the leak, along with the Justice Department, and that these two parties had advised the Fed not to share the documents until the investigation had concluded.
“We've indicated that we fully intend to comply… but we are not going to produce them now because the matter is the subject of an open criminal investigation,” Yellen said.
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