Oct 31 2013
Meeting Comes Ahead of Confirmation Hearings
WASHINGTON—Republican Sen. Richard Shelby on Thursday pressed Janet Yellen, the Obama administration's pick to be the Fed's first chairwoman, on how the central bank would bring its $85 billion-a-month bond-buying program to an end.
Mr. Shelby in an interview said he expressed concern about the Fed's monetary-stimulus program in a private meeting with Ms. Yellen that is part of rounds she is making on Capitol Hill for her confirmation process.
Mr. Shelby, a senior member of the Senate Banking Committee, asked Ms. Yellen when the Fed would end the bond-buying program, "and how would you unwind it? That is a deep concern," Mr. Shelby said. He said Ms. Yellen didn't give definitive answers to those questions.
"She didn't indicate that they were going to stop right now," Mr. Shelby said.
He added he is very concerned about how large the Fed's portfolio of securities has grown and the prospect that it could keep growing. He said he will raise more questions on the issue during Ms. Yellen's confirmation hearing.
The Senate Banking panel has jurisdiction over Fed nominations. Leaders of the banking panel are looking at Nov. 14 as a date to review her nomination.
Mr. Shelby said the two also discussed unemployment, including the high number of people who have dropped out of the labor force, and the Fed's role as a banking regulator.
Mr. Shelby said he still isn't committed to supporting Ms. Yellen, who is currently the Fed's vice chairwoman.
"Could I support her? We'll have to see what happens in the hearings," he said, calling his meeting with Ms. Yellen just the first step of the confirmation process.
He noted that he didn't support Ms. Yellen in 2010 when she was nominated to be vice chairwoman because he was concerned she wasn't a tough enough regulator when she was president of the San Francisco Fed.
Mr. Shelby described the meeting, which lasted about 40 minutes, as "courteous."
A Fed spokeswoman declined to comment.
Ms. Yellen also met Thursday with Senate Banking Chairman Tim Johnson (D., S.D.).
"Our conversation reaffirmed that President Obama has picked an outstanding nominee," Mr. Johnson said in a written statement. He praised her focus on reducing unemployment, saying that Ms. Yellen has a "keen understanding of how the Federal Reserve's work impacts every American." Mr. Johnson said he told Ms. Yellen he plans to move her nomination through the committee "quickly."
Ms. Yellen is scheduled to meet with other lawmakers on the banking panel over the next two weeks. While some Republicans have already said they will oppose her nomination, Democrats are confident she can win Senate confirmation.
Sen. Rand Paul (R., Ky.) in an interview with Bloomberg television on Thursday, said he thinks Ms. Yellen will "in all likelihood" win confirmation. Mr. Paul is among the senators who have threatened delays in Ms. Yellen's confirmation. Last week he said he would hold up her nomination unless the Senate voted on his bill to increase congressional scrutiny of the central bank.