(Reuters) – Federal Reserve Chairman Ben Bernanke on Wednesday rebutted Republican lawmakers pushing a bill that would give Congress the ability to review monetary policy decisions, saying it could compromise central bank independence.
Bernanke said it would be a “nightmare scenario” if politicians decided to second-guess monetary policy.
“That is very concerning because there’s a lot of evidence that an independent central bank that makes decisions based strictly on economic considerations and not based on political pressure will deliver lower inflation and better economic results in the longer term,” Bernanke told the U.S. House of Representatives’ Financial Services Committee.
The hearing was the likely last chance for retiring Texas Representative Ron Paul, known for proposing the Fed should be abolished, to grill the central bank chairman.
“Trillions and trillions of dollars (are) being printed out of thin air,” said Paul.