Federal Reserve Chair Janet Yellen said Wednesday that a proposed law that could involve Congress in monetary policy could damage the economy.
Yellen told reporters that the "Audit the Fed" legislation "would politicize monetary policy by bringing Congress in to make policy judgments in real-time on our monetary policy decisions."
"Congress itself decided in 1978 that that was a bad thing to do. That it would lead to poor economic performance," she said at a press conference following a Fed monetary policy meeting.
In January Republicans in Congress submitted legislation that would allow them to ask the Government Accountability Office to "audit" monetary policy as it is made.
They say the world`s most powerful central bank is too autonomous and unaccountable, and accuse it of misguided policies and political bias.
The law has made Fed-watchers nervous, and has been strongly condemned by the White House.
Yellen said in her semi-annual testimony in Congress last month that the law aimed at politicizing the central bank. She reiterated that to reporters Wednesday, saying the Fed was already answerable to Congress.
"I don`t see a need for changes," she said.
"I believe the Federal Reserve is already one of the most transparent central banks of any around the globe."
