Earlier this week, the House Financial Services Committee, chaired by French Hill (AR-02), convened a hearing with Federal Reserve Chairman Jerome Powell. The focus was on reviewing the Federal Reserve’s Semi-Annual Monetary Policy Report. During the session, committee members questioned Powell on several key issues including deference to the statutory Vice Chair of Supervision under the Biden-Harris Administration, monetary policy, America’s long-term debt, and inflation.
Chairman Hill expressed concerns about the Federal Reserve’s core mission being diluted by various mandates. “Over the past decade, we have witnessed too many distracting mandates diluting the Federal Reserve’s core mission of price stability,” he stated. Hill criticized Powell for being too deferential to Michael Barr, Vice Chair for Supervision, suggesting that Barr had used his position to pursue partisan goals. Hill emphasized that “The Fed needs to focus on core banking risks…and preserve its independence for the long-term benefit of the American People.”
Task Force on Monetary Policy Chairman Frank Lucas (OK-03) highlighted the importance of monetary policy in economic stability. He noted that with a 5-year review of monetary policy underway, there is an opportunity to evaluate its effectiveness. “The creation of the new task force will afford us the opportunity to dive deeper into this topic,” Lucas remarked.
Inflation was another significant point discussed during the hearing. Ann Wagner (MO-02), Chair of Capital Markets Subcommittee, questioned Powell on how inflation is impacting households in Missouri and what plans are in place to ease these burdens. She pointed out that since 2021 households are paying approximately $1,100 more per month due to inflation.
Long-term debt concerns were raised by Rep. Ralph Norman (SC-05). He referenced a statement made by Vice Chairman Yellen in 2011 regarding budget imbalances when federal debt held by public was 64.75% of GDP compared to 99% at end of 2024 as identified by CBO. In response, Chairman Powell acknowledged: “… We’re on an unsustainable path and it’s certainly past time for Congress to work on that.”
