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Source: Congress.gov
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The Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity will come to order. Without objection, the Chair is authorized to declare a recess of the committee at any time. This hearing is entitled, Less Mandates, More Independence. Without objection, all members will have five legislative days within which to submit extemporaneous materials to the Chair for inclusion in the record. I now recognize myself for four minutes for an opening statement. Welcome to today's hearing. The purpose of our meeting today is to examine the Federal Reserve's mission of price stability, maximum employment, and moderate long-term interest rates. Central banks around the world approach their mandates in a number of different ways. There's more than one way to do the job. Many have financial stability mandates or economic growth objectives. Some have an explicit inflation target or prioritize mandates in order of importance. But the piece that they all have in common is price stability. Without that essential function of maintaining stable prices, a central bank has no value. In our country, we assign the Fed to deal with monetary policy and prudential matters. After the passage of Dodd-Frank, these prudential functions expanded considerably. This summer marked the 15th anniversary of that law, and today we are still dealing with the consequences of the dramatic changes it made to our financial system. A concern I continue to have all these years later is that broadening the authority of the Fed's regulatory and supervisory roles ultimately politicizes the institution and threatens its independence. Our Treasury Secretary said it best. Overuse of non-standard policies, mission creep, and institutional bloat threaten the central bank's independence. Simple and measurable tools aimed at a narrow mandate are the clearest way to deliver better outcomes and safeguard central bank independence over time.
The Fed should solely focus on its twin mandate and the safety and soundness of its member banks. Expanding its regulatory reach through unaccountable international agreements or otherwise ill-defined third and fourth mandates distracts the Fed from doing its congressionally mandated job well. The Fed's actions must stay squarely within congressional intent. Vice Chair Bowman has made very positive changes on this front since the last administration, focusing on correcting mistakes of the past. I look forward to continuing to work with her on a capital framework that promotes growth in our economy. And I welcome a fulsome discussion today where we can listen and learn from one another. And with that, I yield back. I now recognize the ranking member of the task force, Mr. Vargas, for four minutes for an opening statement.
Thank you very much, Mr. Chairman. And I also want to thank all of the witnesses that are here with us today. Thank you very much for being here. Since 1977, Congress has given the Federal Reserve clear objectives to promote both maximum employment and stable prices. The Fed's dual mandate is critical in addressing the key way most Americans experience the economy, and that's through their jobs. And it has played a pivotal role in maintaining a healthy labor market. But the Fed is best able to deliver on this mandate when it is independent from political interference. There have been attempts by presidents to shape the Fed's monetary policy in the past, but nothing compares President Trump's ongoing campaign to take control of the Fed. First, he lashed out at Chairman Powell on social media, saying, quote, termination cannot come fast enough, end of quote. Then President Trump said that the fact that the building renovation cost the Fed went over budget was a, quote, fireable offense. And now he is attempting to illegally remove federal board governor Dr. Lisa Cook, all the while installing a White House employee taking a, quote, unpaid leave of absence at the Fed board governor. The end goal here is clear. President Trump is attempting to take over the Fed. But don't take my word for it. Larry Kudlow, the president's former director of National Economic Council, said, quote, the bottom line is this, President Trump's ongoing, Trump's going to take the Fed over, as he should, end of quote. He wants control of the Fed in order to bail out his failing economic agenda. That agenda has slowed growth, weakened job numbers, and persistently delivered above-target inflation. President Trump needs a scapegoat because Americans simply aren't feeling the economic relief he promised. So he's now seeking to convert the Fed into an extension of his administration.
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