US Congress Threatens Independence of Federal Reserve - Yellen

US Congress's attempts to control short-term interest rates will interfere with the Federal Reserve’s ability to carry out independent monetary policy, Federal Reserve Chair Janet Yellen said on Thursday.

WASHINGTON (Sputnik) – Congress, Yellen added, has called for auditing the Federal Reserve and forcing it to tie short-term interest rates to only two economic variables: inflation and economic output, which would be damaging to the US economy.

"This legislation… is an approach to monetary policy that severely threatens the independence of the Federal Reserve in making decisions free of short-term political pressures in the best long-term interests of the economy," Yellen stated.

Weak foreign economic growth and the strong value of the US dollar have had a negative impact on US exports, Federal Reserve Chair also noted.

"The combination of weak foreign growth and a strong dollar… have depressed our [US] export growth,” Yellen stated.

Yellen also said she had confidence that US labor markets and inflation rates will achieve expectations and that domestic economic conditions are ripe for an interest rate hike in the near future.

In addition, Yellen argued, a congressional proposal to fund a highway bill with money from the Federal Reserve’s operating surplus account would weaken fiscal discipline.

In February, US Senator Rand Paul introduced the 2015 Federal Reserve Transparency Act that would require the US central bank to undergo a Government Accountability Office (GAO) review.