U.S. Federal Reserve Chairwoman Janet Yellen was scheduled to appear before a congressional committee Wednesday to take questions on the Fed’s actions and plans for bank regulation, and its role in overseeing the country's financial system.
And though Yellen is unlikely to reveal specifics about the economic outlook and refrain from commenting on the prospects of a December rate hike, the first-of-its-kind hearing would be closely watched as it comes just days after she indicated that the Fed will review raising rates -- which are currently at record-low levels -- in December.
“The markets right now are just waiting for more information, and obviously the bias is for a U.S. rate hike to come a little bit sooner,” Sireen Harajli, a currency strategist at Mizuho Bank Ltd. in New York, told Bloomberg.
The hearing was scheduled to be attended by the Fed’s vice chairman for supervision -- a new position created under the Dodd-Frank law. However, since the White House has failed to nominate an official for the position, the Congress has asked Yellen to step in, for now. And lawmakers will also get a rare chance to pick the central bank chief's brain at a critical policy-making moment and amid continuing weakness in the global economy.
Wednesday’s hearing marks Yellen’s first public appearance before the House Financial Services Committee in over five months. The previous hearing in July witnessed heated exchanges between the chairwoman and committee members, who called for more oversight of the Fed.
A major source of tension between the committee and the Fed stems from a possible leak of confidential information from a September 2012 policy meeting. Republicans have been pushing the Fed to reveal more information about its internal probe into the leak.
And, on Monday, the Fed provided the committee with an internal report commissioned by then-Chairman Ben Bernanke, along with other documents related to its investigation. The leak, and the Fed’s handling of the breach, are likely to remain a focal point of Wednesday’s hearing.
According to the Wall Street Journal, the committee members are also expected to seek Yellen’s endorsement for key bills that the committee is marking up later this week. Yellen has already voiced her support for a bill that seeks to increase the $50 billion asset threshold at which a bank automatically qualifies for tougher Fed supervision under the 2010 Dodd-Frank law.