WASHINGTON (Alliance News) - Federal Reserve Chair Janet Yellen appeared before Congress for a second day on Wednesday, this time taking questions from the House Financial Services panel.
Republican Rep. Jeb Hensarling (R-Tx.), the chairman of Financial Services committee, spoke out in favor of a GOP bill that would require the Fed to follow a mathematical rule for when to raise or lower interest rates.
Asked about the bill, Yellen said it would be a "grave mistake" for Fed to commit to follow a rigid metric.
She said mathematetical formulas should instead be used a tool to guide Fed policy, later telling Rep. Bill Huizenga, (R-Mich.) there is no evidence that adopting a monetary policy rule is the best way to run a central bank.
Original headline: Yellen Rejects GOP-Backed Bill Tying Rate Hikes To Mathematical Rules
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