Sen. Brown Opening Statement at Banking Committee’s Hearing on Semiannual Monetary Policy Report

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement, as prepared for delivery, at today’s hearing titled, “The Semiannual Monetary Policy Report to the Congress.” 

Brown’s remarks, as prepared for delivery, follow. 

 

February 24, 2015

 

Thank you Mr. Chairman.

 

Chair Yellen, welcome back to the Committee.  I look forward to your testimony today.

 

Our economy continued to see strong employment gains and economic growth at the end of 2014. 

 

But the improvements in the economy are not being felt by many Americans. 

 

And the gains we have made over the past five years – some 11.5 million private sector jobs –come on the heels of nine years when we lost 4.5 million jobs.

 

Some pundits and politicians for years have been predicting runaway inflation, but they clearly do not have a very good grasp of what is happening for most Americans.

 

Low wage growth has continued for the majority of Americans, and the declining participation in the workforce is troubling.

 

In fact, as you have pointed out, the income inequality gap has actually widened in the recovery. 

 

It is good that we began our session today by commemorating the Selma foot soldiers.  But we must also note that the wealth gap between white and black American families has widened. 

 

Low- and middle-income Americans have not benefited much from low interest rates.  Workers with stagnant wages have trouble saving for a down payment, their retirement, or their children’s education.

 

These are issues that Congress should be addressing.  But the everyday struggles of Americans need to be part of the Fed’s considerations in making monetary policy, too.

 

Chair Yellen, I appreciate your announcement last month of plans to create a Community Advisory Council. 

 

This Council will have 15 members and meet semiannually with the Board in Washington to offer perspectives on the economic circumstances and needs of low- and moderate-income communities and consumers. 

 

I hope the entire Federal Reserve System – the regional banks as well as the Board in Washington – will engage community leaders and incorporate diverse perspectives into decision-making.

 

We too often hear concerns that the Fed is a system that is run by, and to benefit, the very largest banks. 

Last November, I held a Subcommittee hearing on one facet of this—regulatory capture.  The hearing explored concerns about the culture of the banks and the regulators. 

 

A regulatory culture that is fair and tough, that challenges groupthink, and that produces rules and regulations designed to strengthen the financial stability of our economy will protect Americans’ pocketbooks. 

 

I applaud the Fed for finalizing strong rules for the nation’s largest and riskiest financial institutions. I encourage you to move forward to finalize outstanding proposals so that everyone will benefit from the certainty of having appropriate rules in place.

 

It’s been more than a year since the Fed released an Advanced Notice of Proposed Rulemaking on commodities trading and physical asset ownership, for example, and we have yet to see a proposed rule.

 

But the job doesn’t end there.  You must then send the message to your examiners that these rules must be implemented and enforced as well. 

 

Finally, while some of my colleagues are eager to help you decide monetary policy, I think that is the wrong role for Congress.

 

I am all for transparency, and I think more is better as a general rule.  But every one of us knows that there are times when you can do better by having candid discussions in private – like the caucus lunches we will be heading to after this hearing.

 

Our real goal must be to have a Federal Reserve that is working for all Americans—to have a strong economy that benefits the low-and middle class as much as the wealthiest, and to have a stable and diverse financial system that provides opportunities to all Americans, not one that threatens their savings.

 

That is why your dual mandate – to promote both price stability AND employment, remains as important today as when it was enacted.

 

Thank you, Mr. Chairman.

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