If spending Valentine’s Day with a dozen or so people who simply tolerate you doesn’t sound like an appealing invitation, how about spending the day after Valentine’s Day with some folks who have been politely hostile to your work.
That’s what Federal Reserve Chairman Janet Yellen faces in the week ahead.
On Tuesday and Wednesday, she will appear before two Congressional committees for her twice-annual testimony on the state of the American economy and the central bank’s actions. The Valentine’s Day date with the Senate Banking Committee likely will lack the spark her appearance before the House Financial Services Committee on Wednesday could have.
These will be the first Congressional hearings for Yellen since the Fed raised its target short-term interest rate in December. They also mark her first appearances before Congress since President Donald Trump’s inauguration. During the campaign, Trump accused Yellen of using the Fed’s monetary policy to help Hillary Clinton. He also pledged to replace her when her current term as chair ends next year. And two weeks after his swearing in, Trump signed an executive order requiring a review of financial regulations.
Yellen will hear how Trump’s election has emboldened the Fed’s critics in the House who talk about greater Congressional oversight of the agency and accuse the Fed’s “amorphous, opaque and improvisational” policies for lackluster economic growth.
All this palace intrigue can act as a fog, however, to what matters to investors: the direction of America’s economy. Trump’s victory was pushed by his promise of a faster-growing economy fueled by lower tax rates, less regulation and billions of dollars in new infrastructure spending. Yellen is unlikely to step directly into the coming debate over Trump’s budget plans, but with the Fed signaling higher interest rates to come, any Trump economic boom may be less then what he hopes.
Financial journalist Tom Hudson hosts “The Sunshine Economy” on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.