(Reuters) – A new congressional task force focused on the Federal Reserve, set up by the head of a powerful committee who is critical of the U.S. central bank’s approach to setting monetary policy, has penciled in its first public hearing for early next month.
The Task Force on Monetary Policy, Treasury Market Resilience, and Economic Prosperity will convene its first-ever hearing on March 4 at 10:00 a.m. ET (1500 GMT), titled “Examining Monetary Policy and Economic Opportunity,” according to the House Financial Services Committee website. No other details, including witnesses, have yet been provided.
The hearing comes as the Fed is embarking on a review of its operating framework, a blueprint for executing policy to meet its congressional dual mandate to foster both price stability and maximum employment.
Financial Services Committee Chairman French Hill, a Republican from Arkansas, last week was critical of the Fed and its leader, Chair Jerome Powell, for being slow to respond to the signs that inflation was strengthening as the economy emerged from the COVID-19 shutdowns of early 2020 that temporarily caused widespread job losses.
The Fed unveiled a new operating framework in August 2020 that placed greater emphasis on safeguarding employment. By early in 2021 inflation had begun its march to four-decade highs and the Fed did not respond with interest rate increases to slow that until March 2022.
Hill, in opening remarks on February 12 to Powell during the Fed chair’s twice-yearly oversight hearing before the committee, said the Fed kept rates too low for too long in the face of rising inflation. “In hindsight, the adoption of the so-called flexible average inflation targeting appears ill-timed and ill-fitted for a post-pandemic world,” Hill said.
(Reporting by Dan Burns; Editing by Andrea Ricci)
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