Federal Reserve Chairwoman Janet Yellen waded back into the academic discussion about inequality Thursday, defying the criticisms of Republicans who have accused her of introducing partisanship into the central bank’s business by speaking out on a topic at the top of the Democratic Party’s agenda.
“Economic inequality has long been of interest within the Federal Reserve System,” Yellen said Thursday at the opening of a conference on economic mobility in Washington, calling rising inequality a “disturbing” trend.
Yellen noted that past Fed leaders, including her George W. Bush-appointed predecessor Ben Bernanke, have spoken about inequality trends publicly. She also mentioned that the Fed, with its sizable research budget and massive roster of research economics, has resources to investigate inequality data that are not available elsewhere. The chairwoman also cited a Pew Research poll in claiming that inequality is among the top concerns of the broader public.
Those justifications may have been intended for congressional Republicans, who subjected Yellen to somewhat hostile questioning during her legally-mandated appearance before the House of Representatives in February.
Then, GOP congressmen criticized a speech Yellen gave on inequality and economic mobility in October. Several members suggested that it was a partisan act for her to highlight one of the Democratic Party’s main campaign themes just days before the midterm elections. “I hear you taking a Democrat line,” Rep. Sean Duffy, R-Wis., said during a particularly aggressive line of questioning.
Congressional Republicans have been working on legislation to reform the Federal Reserve, aimed at what they call a lack of accountability and transparency.
Yellen defended her comments on the grounds that inequality is a major economic development within the Federal Reserve’s purview.
In her October speech on inequality in Boston, Yellen said that “the extent of and continuing increase in inequality in the United States greatly concern me” and declared that “it is appropriate to ask whether this trend is compatible with values rooted in our nation’s history, among them the high value Americans have traditionally placed on equality of opportunity.”
On Thursday, Yellen asked researchers to probe into the role that families and communities play in advancing or hindering economic mobility. She also requested more research on the relationship between mobility and economic growth.
