The House Financial Services Committee is holding its semi-annual hearing with Federal Reserve Chairman Jerome Powell today. Amid ongoing inflation concerns, Republicans are urging Chair Powell to maintain the Federal Reserve's independence and resist political pressures, particularly regarding proposals like Basel III Endgame.
Chairman McHenry's opening remarks were delivered as follows:
“Thank you, Chairman Powell, for being here today.
“With prices increasing more than 20 percent since President Biden took office, inflation remains top of mind for American families.
“In fact, only a quarter of Americans describe current economic conditions as ‘good’ or ‘excellent’ according to the most recent data from Gallup’s economic confidence index.
“Despite President Biden’s gaslighting, inflation was not nine percent when he took office. Out-of-control inflation was not something this Administration inherited.
“The nearly $2 trillion partisan and fiscally reckless spending in the American Rescue Plan poured fuel on a smoldering inflationary fire.
“After a delayed response to runaway inflation, the FOMC has acted with a historic pace of interest rate hikes to ease the pain caused by Democrats’ failed economic policies.
“But so far this year, inflation has been more persistent than many, including the Fed, previously expected. There is still work to be done to reach the Fed’s two percent target.
“As I’ve repeatedly said, your commitment to the Fed’s independence is critical.
“Just as you did during the previous administration, you must not allow politics to cloud the Fed’s monetary policy.
“However, despite your best efforts, Fed independence remains at risk. And unfortunately, the calls are coming from inside the building.
“Under Vice Chair Barr, the Fed’s regulatory and supervisory agenda has become politicized.
“Most notably, the development of the Basel III Endgame proposal has been a mess. This process has been cloaked in opaque standards and timelines set at meetings of unaccountable global governance bodies.
“The Fed has promised to process 410 almost universally negative public comments regarding the unjustified and under-analyzed initial proposal.
“Recent press reports—which seem to be the only way Congress gets details on Basel III Endgame progress—and your comments yesterday indicate the Fed will finally conduct a long-overdue quantitative impact study. If true, this is a promising development.
“Chair Powell, the last time you testified before this Committee, you stated that initial Basel III Endgame proposal will undergo ‘broad and material changes.’
“Yesterday in Senate testimony you said that Board supports reissuing updated proposal for public comment.”
“I’m concerned that press reports also claim that any changes will be incorporated into this quantitative impact study. That study would then be issued for public feedback with a relatively short comment period.”
“I will reiterate what I’ve said privately: broad and material changes necessitate a full re-proposal. Full stop.”
"Failure to do so will result in an immediate Congressional Review Act vote."
“I’ll close with this: Your steady leadership at Federal Reserve has shepherded our economy through extreme uncertainty.”
“We now find ourselves amid new uncertainty surrounding our nation’s leadership.”
"Doubts often lead to bad decision making and worse policy."
"I urge you to reject outside political pressure in this volatile time and stay course for good of American people and our economy as whole."