Garrett Pushes Fed on Political Conflicts of Interest

WASHINGTON — Rep. Scott Garrett, R-N.J., is demanding answers from the Federal Reserve Board on whether one of its board member's political ties to the presidential campaign of Hillary Clinton compromises the central bank's independence.

Garrett, who chairs the House subcommittee on capital markets and government-sponsored enterprises, noted in a letter to Fed Chair Janet Yellen that Lael Brainard has given $2,700 to Hillary for America. He argued that Brainard might be reluctant to raise interest rates at an upcoming November Federal Open Market Committee meeting because she may be worried about how it would affect the presidential campaign. Brainard has also been rumored as a possible Treasury secretary pick should Clinton win the White House.

"The importance of voting members — particularly those who could have a personal stake in a Clinton victory — entering that meeting with an unbiased mind cannot be overstated," Garrett said in the letter. "The most serious question is whether the Federal Reserve's vaunted independence is compromised in the eyes of the public when a sitting governor openly engages in political activity, and could personally benefit from the outcome of the November elections."

Garrett first raised the issue of Brainard's independence during a House Financial Services Committee hearing on Sept. 28. During the hearing, Yellen responded that Brainard had acted in accordance with the law and had not appeared to act in a political fashion.

GOP presidential nominee Donald Trump has recently questioned the Fed's independence, arguing that the central bank is keeping rates low to benefit Clinton.