Pelosi Defends Federal Reserve Independence on House Floor: “The Fed Chair Can’t be a Party Hack.”
Washington, D.C. – Today, Speaker Emerita Nancy Pelosi delivered remarks on the House Floor underscoring the critical importance of preserving the independence of the Federal Reserve System. Drawing from her early experience in Congress on the Financial Services Committee, Pelosi highlighted the foundational role the Fed plays in maintaining economic stability, controlling inflation and safeguarding employment—all free from political interference.
Pelosi’s speech comes as Congress marks the 15th anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, landmark legislation enacted in response to the 2008 financial crisis. Reflecting on the devastation caused by irresponsible banking practices, Pelosi emphasized the ongoing need for strong regulatory oversight and reaffirmed the urgency of keeping monetary policy decisions rooted in data and insulated from partisanship.
Watch her full remarks here.
Read the transcript of Speaker Emerita Pelosi's Floor remarks below:
Speaker Emerita Pelosi. Mr. Speaker, I rise today in strong support of one of the bedrock principles of our economy: the independence of the Federal Reserve Board.
For more than a century, the Federal Reserve has served as a cornerstone of the economic system of our country, tasked with safeguarding price stability, maximizing employment and preserving the health of our country—independent from political pressure, insulated from partisanship and rooted in data and principle.
When I first came to Congress, Mr. Speaker, I was a member of what was then called the Banking, Housing and Urban Affairs Committee—now Financial Services.
At that Committee, as it is today under the new name, we heard from the chair of the Fed on a specific amount of time required by Congress on two subjects.
According to the Humphrey-Hawkins law, they would report to us on inflation and on unemployment. Employment and unemployment.
And that was the purview in their communication with Congress that was required on a regular basis. I heard one of the chairs of the Fed say, 'Unemployment is dangerously low.'
Scared me to death—how could it be? But it was a reporting as to its impact on inflation.
That was when I was a new Member. When I was Speaker, I said to our Members—who frequently asked, 'Why don’t we have the Fed be more accountable to us?'—I said, 'It has to be independent.'
They have their own funding. They don’t have to depend on us for that because their independence is essential.
Any of us who had economics in college or beyond knows that the independence of the Fed is essential to the respect that our country commands in terms of our own economy throughout the world. The chair of the Fed serves as the chair of central banks globally.
And he can’t be a party hack. It can’t be somebody who’s there because the President wants to create interest rates. That’s not the President’s job—to create interest rates. It’s the chairman of the Federal Reserve Board that does that.
So it’s really important, and I come to it on this day to say this because of the rumors that we hear—of the flirtation with making the Fed just a handmaiden of the presidency.
It would be wrong. It would be wrong to do. And we would be viewed disrespectfully if we were ever to go down that path.
Now, this comes at a time when we are observing the 15th anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
As some of us here know who served with Barney Frank—who was then the chair of the then-Financial Services Committee and a master of his agenda there—and Senator Dodd from Connecticut, who was on the Senate side with that.
It was necessary, Mr. Speaker, because of what was happening in the financial community. The banks were—I mean, it was awful. It was horrible.
Well, you all know that around September of 2008 we were told that our financial system was melting down.
It was doing so because of—well, I’ve written about it in my book, and I won’t go through the whole thing right now—but because of what was happening terribly in the financial system by the banks and financial institutions.
What happened? Millions of people lost their money. Trillions of dollars from the wealth of the country. Millions of people losing their jobs. So many losing their homes, losing their savings and the rest.
So this bill was necessary. Of course, after the bill was passed—and to this day—still the banks and other financial institutions try to undermine it and weaken it and weaken it.
The Volcker Rule—former chair of the Fed—had a provision in there for the security of our economic system.
So these notions that they’re putting forth of making the Fed a party chair a party hack is just so very wrong. It’s just so very wrong.
And just to say this again: in school, you probably learned of fiscal policy and that’s what the Congress of the United States does.
We create the budget of the United States. And the monetary policy—fiscal here, monetary at the Fed—establishes the rates and terms relating to inflation.
So let’s just rid ourselves, disabuse ourselves of notions, when instead we need serious ideas about how to make our economy work for the American people.
Thank you, Mr. Speaker.