Republicans' audit move set to challenge Fed's independence

Washington

AFTER unemployment and deflation, Federal Reserve chair Janet Yellen finds herself in her toughest battle yet, fighting a push by Congress to assert itself over monetary policy.

Newly in control of both houses on Capitol Hill, Republicans accuse the Fed of misguided policies and political bias, saying the world's most powerful central bank is too autonomous and unaccountable.

In January, they submitted "Audit the Fed" legislation that could give lawmakers power over setting interest rates and how banks are policed.

The Fed calls it a blatant move to politicise its work. But it is clearly worried that the law might pass, impinging on its much vaunted independence.

Ms Yellen got a taste this week of what's to come when legislators accused her of going way beyond the Fed's mandate and of actively supporting the Democratic Party's policies. "The Fed already has been completely immersed and guided by partisan politics," said Cong…