Hensarling: ‘Unsustainably low interest rates clearly didn’t solve the problem’
More Transparent Fed is What’s Really Needed to Help Lift the Economy
December 16, 2015 -
WASHINGTON – Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement about the Federal Reserve’s decision to raise its benchmark interest rate from near zero, where it has been since 2008:
“The real question isn’t whether the Fed should be raising interest rates or lowering interest rates; it’s whether the Fed is giving our economy sustainable interest rates. Getting back to sustainable, market-based interest rates is better for consumers, investors and our economy overall. Unsustainably low interest rates clearly didn’t solve the problem or else Americans today wouldn’t be stuck in the slowest, worst-performing economic recovery of our lifetimes.
“Our economy would be healthier if the Federal Reserve was more predictable in its conduct of monetary policy, more transparent about its decision-making, and more accountable when regulating. The House-passed Fed Oversight Reform and Modernization Act, the FORM Act, accomplishes these goals. The FORM Act will help expand economic opportunity because consumers, job creators and investors will all have more confidence in making financial plans. The more Americans can understand how the Fed will act, the better they can plan for the future.”
Background on the FORM Act:
The FORM Act passed the House on Nov. 19. It requires the Fed to choose a monetary policy strategy and communicate that strategy to the public.
“Small businesses and entrepreneurs require an environment where monetary policy is sound and stable, and access to capital is affordable and abundant. So much of what the Federal Reserve does impacts these critical areas. Shedding sunlight on Federal Reserve operations, and requiring regulatory and operational standards consistent with other government agencies are sensible reforms. These accountability measures will foster greater certainty and stability for our economy,” said Karen Kerrigan, the President and CEO of the Small Business and Entrepreneurship Council, in a statement supporting the FORM Act.
Because the FORM Act allows the Federal Reserve to choose its own strategy – with the power to amend its strategy or depart from it if economic conditions warrant – the bill in no way interferes with the Fed’s independence in setting monetary policy.
For more information about the FORM Act, click here.