Treasury Secretary Janet Yellen will be on Capitol Hill this week, starting this morning at 10 a.m. The Republican-led House Financial Services Committee will get the first crack at interrogating President Joe Biden’s top economic official at a time when the administration is touting positive new jobs and inflation data.
This is an annual hearing ostensibly about the Financial Stability Oversight Council, a government body made up of other financial regulators that Yellen chairs. You can read her testimony about FSOC’s annual report to Congress work here. But FSOC is unlikely to be at the top of most lawmakers’ minds.
We asked several House Republicans on Monday night what they planned to ask the Treasury secretary. Virtually all said they wanted to keep their cards close. “You’ll have to watch the hearing,” Rep. Blaine Luetkemeyer (R-Mo.) said. “We don’t want to give her a heads up.”
Fair enough! But expect some Republicans to play the hits on inflation woes, government overreach and FSOC’s looming proposals to enhance nonbank supervision.
We anticipate a number of Democrats giving Yellen time to talk up the continued strength of the U.S. economy. “I’m pretty happy about where the economy is,” Rep. Sean Casten (D-Ill.) told us.
What Yellen will say: Yellen will discuss FSOC’s work “monitoring the increasing use of artificial intelligence in financial services,” as well as the risks of stablecoins and other digital assets.
“Applicable rules and regulations should be enforced, and Congress should pass legislation to provide for the regulation of stablecoins and of the spot market for crypto-assets that are not securities,” Yellen will tell Congress.
Meanwhile in the Senate: Yellen will get a brief one-day reprieve from Congress before heading over to the Senate Banking Committee on Thursday at 9 a.m.
Senate Republicans are preparing to hammer Yellen on a number of fronts, including a lack of testimony before the Banking panel in 2023. (Yellen testified before the Senate Finance Committee just days after the onset of March’s banking crisis, for what it’s worth).
Ben Watson, GOP spokesperson for the Senate Banking Committee, told us Republicans will also ask whether “Iran has funneled potentially U.S. sanctioned funds to terrorist groups that are attacking our troops” and Israel.
SALT off the menu: House leadership pulled a vote on a SALT-related rule that was supposed to go to the floor today. The rule would’ve teed up New York Republicans’ bill granting more state and local tax deductions in 2023, as we scooped Monday night.
It may come up next week. But it’s still unclear whether Republicans will have the votes to pass the rule with some hardline conservatives opposed to the measure and most Democrats opposed.
— Brendan Pedersen, Laura Weiss, John Bresnahan and Heather Caygle
