‘Cozy’ ties with DNC? Fed challenged over governor’s Clinton ties

by WorldTribune Staff, September 29, 2016

A Republican congressman called on Federal Reserve chief Janet Yellen to explain how one of the allegedly non-partisan central bank’s governor’s coziness to Hillary Clinton is not a conflict of interest.

Rep. Scott Garrett, New Jersey Republican, questioned Yellen on donations that Fed governor Lael Brainard has made to the Clinton campaign and on reports that Brainard is being considered for a senior position in a possible Clinton administration.

Lael Brainard. /Getty Images
Lael Brainard. /Getty Images

During Yellen’s testimony before the House Committee on Financial Services on Sept. 27, Garrett asked: “A Fed governor can be in direct negotiations with a political campaign looking for a future job and that is not a conflict as far as you’re concerned?”

“I would have to consult my counsel. I’m not aware that that’s a conflict, but I would …”

Yellen said in earlier testimony on Sept. 27 she had “absolutely no awareness” of Brainard’s reported contact with the Clinton campaign about a job.

Brainard donated the maximum individual amount of $2,700 to Clinton’s campaign. Yellen said that the Hatch Act does not prohibit political contributions by Fed governors.

Pressed on whether Brainard was ever asked to recuse herself from monetary policymaking due to her “close involvement” with the Clinton campaign, Yellen said: “She’s acting in a way that is permitted by the rules we are subject to. Each one of us has to decide for ourselves.”

Garrett said that “as the saying goes, perception is reality. Whether you like it or not, the public increasingly believes that Fed independence is nothing more than a myth. The Fed has an unacceptable cozy relationship with the Obama administration and with higher ups in the Democratic party.”

GOP candidate Donald Trump, in the first presidential debate, said that the Fed has been keeping short-term interest rates low to help the Obama administration and was sustaining a “big, fat, ugly bubble” in the stock market.

Yellen said earlier this month that “partisan politics play no role in our decisions.”

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