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After a Crisis, We Bounced Back Faster than Europe, Says Fed Chair Yellen

Both sides of the House grilled Fed Chair Janet Yellen Wednesday, including heated opinions on the lack of 'credibility' in the Trump administration.
Image: Janet Yellen
Federal Reserve Chair Janet Yellen speaks during a news conference on June 17, 2015.Manuel Balce Ceneta / AP file

Federal Reserve Chair Janet Yellen answered tough questions Wednesday in her semi-annual testimony to the House Financial Services Committee.

Yellen responded calmly to heated opinions repeatedly voiced from committee members, especially on the topic of the Dodd-Frank Act, a set of regulations created in response to the Great Recession in 2008 and which President Donald Trump aims to dismantle.

"It's 22,000 pages long," pointed out Chairman Jeb Hensarling, the Texas Republican who floated a bill earlier this week that would strip more power from the Consumer Financial Protection Bureau and make it easier for banks to opt out of the Fed's compliance rules.

The Fed has not yet "found the proper balance" between regulation and growth, Hensarling told Yellen.

"The economy is recovering from a very severe crisis," she replied. "We've put in place stronger financial regulation that has forced our banks to build up their capital buffers to deal with problem loans and to strengthen themselves to the point where they have been to support economic growth and recovery in our economy."

Related: Dodd-Frank Watered Down as Trump Signs Executive Order

Yellen pointed out that since the recession, the U.S. has bounced back faster than Europe did after the "headwinds" weighing on the global economy.

"The Federal Reserve has put in place highly accommodative monetary policies meant to spur spending in the economy and restore low unemployment or to achieve the goal of maximizing employment and price stability as assigned to us by Congress," she testified.

"I believe we're coming very close to achieving those objectives," she added.

Congresssman Greg Meeks offered spirited questioning that addressed the economy's job gains, saying "We should be applauding and not criticizing" the 16 million jobs gained since the recession. "We've come a mighty long way from an economy that was in the tanks," he added.

Meeks also stressed the importance of a steady Fed governance, noting that America's credibility was in question since "with the current administration, they don't even trust each other."

"We've had anything but certainty for the last 14 days," he told the committee.

Meeks wasn't the only lawmaker to touch on the current political climate. Congressman Mike Capuano, who also sits on the ethics committee, asked Yellen a series of questions about whether or not she owned any banks or stocks or received any emoluments. "That would be a conflict of interest," she answered.

"I wish everyone tried to have the same high ethical values," responded Capuano.