A Republican takeover of the U.S. Senate on Election Day would promise increased political turbulence for the Federal Reserve.Nah, even if the Republicans take the Senate, I'm sure the Fed will find the new majority can be quite flexible...
Financial executives say a GOP-led Senate would ratchet up congressional scrutiny of the central bank's interest- rate policies as well as its regulatory duties as overseer of the nation's largest financial firms. Republicans haven't controlled the Senate since before the 2008 financial crisis and recession, which put a spotlight on the Fed and its powers.
"If the Republicans take control of the Senate and thus have control of both the House and the Senate--two words for the Federal Reserve: Watch out," said Camden Fine, president of the Independent Community Bankers of America.
Leading the GOP wish list in dealing with the Fed would be legislation to open the central bank to more scrutiny of its interest-rate decisions, using congressional audits of monetary-policy matters that Fed officials strongly oppose. Many Republican lawmakers also want to require the Fed to use a mathematical rule to guide interest-rate decisions or shift its focus more directly to inflation rather than inflation together with unemployment. All of that would come on top of heightened bipartisan scrutiny of the Fed's regulatory moves.
GOP Senate Takeover Would Put Fed Under Microscope