(WASHINGTON EXAMINER) Federal Reserve Chairwoman Janet Yellen invoked the Great Inflation of the 1960s and 1970s in pushing back Tuesday against a congressional proposal to subject the central bank to an audit of its monetary policy.
That ugly episode, in which inflation soared into the double digits and pushed up interest rates, was one of the biggest black marks in the Fed’s 102-year history. Yellen blamed it on pressure from Congress, which she said would follow legislation to audit monetary policy proposed by Sen. Rand Paul, R-Ky.
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“I would remind you that in the early '70s, when inflation built and became an endemic problem in the U.S. economy, history suggests that there was a political pressure on the Fed that interfered with its decision-making,” Yellen told lawmakers Tuesday.