Yellen: Fed is not political

Federal Reserve Chairwoman Janet Yellen fiercely defended her institution’s reputation as free of partisan politics Wednesday.

She told reporters that despite the fact that one of the Fed’s top officials donated to Hillary Clinton’s presidential campaign, the central bank itself is not affected by partisan politics.

{mosads}“We are a nonpartisan, independent institution … I have never seen political views in any way influence the policy judgments that are made inside the Federal Reserve,” she said Wednesday. “I want to say that emphatically.”

Yellen addressed the issue after Bloomberg reported that Fed Governor Lael Brainard donated $750 to Clinton’s campaign while at the bank. Brainard is a former top Treasury Department official under President Obama, and her husband was a top State Department official under Clinton.

Those donations have opened a fresh line of attack for Fed critics in Congress, as top Republicans in both the House and Senate argued the donations prove the supposedly independent Fed is unduly influenced by the Obama administration.

Their critiques come at the same time that GOP lawmakers are pushing legislation to alter the Fed’s operations, subjecting it to new limits on its powers and additional oversight. Fed officials, including Yellen, have resisted those efforts, in large part arguing they would endanger the Fed’s political independence.

Yellen said that Fed officials are covered by the same laws regarding political activity that apply to other federal workers. That law allows for campaign contributions but bars “other forms of partisan activity.”

Yellen made her remarks at a press conference following the Fed’s most recent policy meeting, where the central bank agreed to keep interest rates at prior levels.

While arguing politics were not inherent at the Fed, Yellen did give a nudge to lawmakers, saying she was eager to see the Senate act on some long-stalled Fed nominees.

Senate Republicans have been slow to act on a pair of nominees to join the Fed as governors, who were nominated months ago. The Fed is currently operating with just five governors, and Yellen argued those missing perspectives could be useful as it charts policy.

“Congress intended for the Federal Reserve Board to have seven members,” she said. “I would like to see the Senate move forward and consider these nominees.”

A large reason those nominees have not moved is because the White House has not yet nominated someone to fill another opening at the Fed. The Dodd-Frank financial reform law created a new position, the vice chairman for supervision, that oversees the central bank’s expanded role as a financial regulator.

The president has not nominated someone for that position; Dodd-Frank became law in 2010. Senate Banking Committee Chairman Richard Shelby (R-Ala.) has said he does not want to move on the current Fed nominees until someone is named to fill that spot.

On that front, Yellen said it was not up to her how to go about filling the position. Rather, that is a question for the White House.