Yellen opposes GOP proposal to boost Fed oversight

Federal Reserve Chair Janet Yellen says legislation supported by House Republicans to make the Federal Reserve more transparent and accountable would be a “grave mistake” that could harm the U.S. economy by decreasing its political independence.

Yellen says the proposal which could be voted on by the House this week is “significantly flawed” because it would require the Fed to use a mathematical rule in determining where to set interest rates. She says that approach is unworkable and would lead to “poor economic outcomes.”

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The measure is supported by conservative Republicans who want to increase congressional oversight of the Fed. Yellen’s comments opposing the proposal came in a letter sent to congressional leaders.

The measure faces strong opposition from Democrats.

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