Yellen set to be grilled by Senate banking panelFederal Reserve policy makers have publicly debated whether to maintain their bond-buying pace since well before Janet Yellen was named last month to succeed Chairman Ben S. Bernanke. But one voice has been missing: Yellen’s.
Today, she’ll express her views publicly for the first time in seven months on the record stimulus she’s supported and that some lawmakers are using to justify voting against her. Testifying to the Senate Banking Committee, Yellen will try to defend a policy that’s swelled the Fed’s balance sheet to almost $4 trillion while facing four Republicans who voted no on her 2010 bid to be vice chairman.
Democrats hold 12 seats on the Banking Committee, enough to send her full nomination to the Senate, even without Republican support. At least one Republican, Mike Johanns, a Nebraska lawmaker who supported Yellen in 2010, said he would probably renew his support “unless something were to come up.” No Democrat has voiced opposition to Yellen.
In 2010, Republican senators including Idaho’s Mike Crapo, Alabama’s Richard Shelby, Louisiana’s David Vitter and Tennessee’s Bob Corker, all of whom remain on the Banking Committee, opposed her.
“I can’t envision a scenario where she’s blocked,” said Greg Valliere, chief political strategist for Potomac Research Group in Washington.
As vice chairman, Yellen led a subcommittee focused on the Fed’s communications strategy, and during her tenure has given detailed speeches on how the central bank’s policies work. Once under consideration for the top job, she stopped giving speeches. Her last public address, on regulation, was on June 2. She has not given a speech on monetary policy since April 16.
The FOMC began $40 billion in monthly purchases of mortgage-backed securities in September 2012 and announced it would add $45 billion in Treasury securities to that pace in December. Fed officials have said their current pace of purchases will continue until the labor market improves “substantially.”
More work to do
Last month, when President Barack Obama announced her nomination, Yellen said more needs to be done to strengthen the nation’s economic recovery.
“While we have made progress, we have farther to go,” she said Oct. 9. “The mandate of the Federal Reserve is to serve all the American people, and too many Americans still can’t find a job and worry how they will pay their bills and provide for their families.”
On Nov. 8, a Labor Department report showed employers added 204,000 workers last month, more than economists forecast, on the strongest hiring by companies since February.
Assuming Yellen makes no missteps in the hearing, she is likely to go on to win confirmation from the full Senate and replace Bernanke, whose term expires Jan. 31, said Robert Shapiro, chief executive officer at Sonecon, an economic advisory firm in Washington, and a former Commerce Department official under President Bill Clinton. Bloomberg
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