Federal Reserve Chair Janet Yellen is pushing back on the suggestion that several central bank officials requested an end to an internal investigation of a potential leak.
At a press conference in Washington on Wednesday, Yellen was asked to address recent reports that that in 2012, a market research analyst had obtained and shared confidential information from the Federal Open Market Committee, which deliberates on monetary policy.
House Financial Services Committee Chairman Jeb Hensarling wrote to Yellen last week expressing concern that the Fed seems to lack “proper internal controls” to protect confidential information. The Texas Republican requested that the Fed hand over information surrounding the reported leak.
“It is my understanding that although the Federal Reserve’s General Counsel was initially involved in this investigation, the inquiry was dropped at the request of several members of the FOMC,” Hensarling wrote in the letter, though he did not elaborate how he had obtained this information.
But asked about this claim Wednesday, Yellen said it simply wasn’t true.
“That is an allegation that I don’t believe has any basis in fact,” the Fed chair said. “I’m not going to go into any details but I don’t know where that piece of information could possibly have come from.”
Yellen added that the Fed takes seriously the task of safeguarding confidential information and that it plans to brief select lawmakers about the issue. “We’ll certainly cooperate and try to provide them the information that they seek,” she said.
Yellen also acknowledged that the Fed’s inspector general is currently investigating the matter.
“According to information we have obtained, the Federal Reserve’s general counsel was initially involved in the investigation, but the inquiry was dropped at the request of several members of the FOMC,” a Hensarling spokesperson said in an email to CNN Wednesday, but did not elaborate further on what information the committee had received or provide the names of the FOMC members.
This most recent back-and-forth could exacerbate existing tensions between the Fed and congressional Republicans. In recent years, GOP lawmakers have grown increasingly vocal in their calls for heightened transparency and accountability at the central bank.
Republicans lawmakers want to see structural changes to the Fed and are also pushing the so-called Audit the Fed bill, a proposal that would require a full audit of the central bank’s monetary policy deliberation.
As she has in the past, Yellen stated her opposition to the bill. The Fed is already plenty transparent, she said, and cautioned that more congressional involvement would politicize the Fed’s decisions.
“Global experience shows that giving central banks independenc e to make monetary policy decisions that they think are in the best interests of the country and consistent with their mandates leads to lower inflation and more stable macroeconomic outcomes,” Yellen said.
