Members of two Congressional committees managed to occupy Federal Reserve Chair Janet Yellen for almost six hours of semi-annual hearings last week. To do so, however, they asked the same questions over and over again. Our elected representatives were not trying to find inconsistencies in her answers, as there never are and none of the interlocutors were actually really listening. Rather, politicians were filling the time as long as the klieg lights remained on.
Even a devoted Fed-head has to admit that the drama has leached out of the event over time as the result of actions on both sides of the hearing table.
Monetary policy was always complicated, but never more so now that central bankers describe what they do in academic terms. Put frankly, members of the House and Senate are not well suited to dig into these details. Remember these missed opportunities anytime there is talk of auditing the Fed’s conduct of monetary policy. There is already a Congressional mechanism in place. The semiannual testimonies were designed to assess "…the efforts, activities, objectives and plans of the Board and the Federal Open Market Committee with respect to the conduct of monetary policy" (as specified in Section 2B of the Federal Reserve Act)1. The problem is that the oversight committees do not press these issues.