During a Senate Banking Committee hearing to discuss the Semiannual Monetary Policy Report to Congress on Thursday, Senator Bob Corker questioned Federal Reserve Chair Janet Yellen about the role of Congress in increasing productivity and the need to reduce the national debt.
In questioning Ms.
Yellen about the limitations of monetary policy, Senator Corker pointed out that it is Congress’s role, not the Fed’s role, to put in place policies that stimulate economic growth and productivity.
“…the concern that we have is the most vulnerable in our society are the ones that are hurt most when we have downturns and the slowest to regain,” said Senator Corker in the hearing. “And there’s no question there is a wealth gap in our country. The question is what do we do about it. You’ve mentioned ‘the most important factor determining advances in living standards is productivity growth’…[I believe] when people try to look at the Fed through monetary policy to increase productivity, it’s a ridiculous notion…So, that [putting in place policies to increase productivity] is our job. And we’re not doing our job.”
Senator Corker also emphasized the need for Congress to address the growing national debt to strengthen the country’s economic outlook by saying, “As we accumulate debt…we’re really hurting productivity.”
Ms. Yellen responded by saying, “over long periods of time it is. Yes, I would agree.”
Ms. Yellen’s testimony Thursday was her first since the Federal Reserve’s decision to raise interest rates in December 2015.