Washington, D.C.— U.S. Congressman Andy Barr (R-KY) secured key commitments from Federal Reserve Chairman Jerome Powell during today’s House Financial Services Committee hearing.
Powell confirms Fed won’t bend to political pressure, will maintain 2% inflation target rate:
Barr (1 minute 35 seconds): “Given the chasm between where we are, and where we need to be, do you anticipate any effort within FOMC to increase its inflation target to 3 or even 4%, and will you commit to resist any efforts to change the inflation target that would make it even more difficult to anchor inflation expectations?”
Powell: “that’s not something we would do. We are shooting for 2%.”
Powell says Fed won’t jeopardize access to capital for energy producers:
Barr (3-minute mark): “I am concerned that the Fed’s regulatory framework could exacerbate supply constraints, and specifically, to sideline capital that institutions could deploy to spur business investment. I am especially concerned about the climate finance agenda and climate stress testing that would redirect capital away from fossil energy at precisely the wrong time when we need investments in fossil energy. Do you acknowledge the role of the Fed related to business investment, regulation, and the possibility of further constraining supply?
Powell: "We certainly do not want to be and are not in the business either to or away from any particular industry. We want those decisions to be made in the private sector."
Powell rejects adding Equity to Fed’s Mandate:
Barr (4 minute 30 seconds): “Finally, a question about Fed independence: last week, my Democrat colleagues passed a bill out of the House adding to the Federal Reserve’s mandate by tasking the Fed with the additional responsibility of focusing on racial and socioeconomic disparities rather than remaining focused on price stability. Do you think giving the Fed additional responsibilities outside of its core competency would politicize the Fed and compromise its independence precisely when you should be focused on combatting inflation?
Powell: “I’ll just say the public has been well served by the dual mandate and I would be concerned with any statuary requirement that sets us up to be accountable for achieving things that we can’t achieve with our tools.”