Chamber president defends Fed from GOP fire

U.S. Chamber of Commerce President Tom Donohue on Wednesday shot back at GOP critics of the Federal Reserve.

Donohue defended the Fed’s actions in response to the financial crisis and recession and said it is important to ensure lawmakers on Capitol Hill do not threaten the central bank’s historic independence on monetary policy.

“We must maintain the independence of the Fed and be very careful not to louse that up on Capitol Hill,” Donohue told reporters in a press briefing after a speech at the Chamber.

Donohue responded to a question about efforts in the House and Senate to change the mandate of the Federal Reserve. Sen. Bob Corker (R-Tenn.) and Rep. Mike Pence (R-Ind.) on Tuesday said they wanted to change the Fed’s mandate so it would focus exclusively on inflation and not also on maintaining maximum employment.

The announcement by Corker and Pence follows intense GOP criticism of the Fed’s decision to purchase $600 billion in long-term assets in the hope of promoting additional economic growth and lowering the nation’s 9.6 percent unemployment rate. Federal Reserve Chairman Ben Bernanke in recent months has expressed repeated worries about the nation’s slow growth and the difficulty of reducing the jobless rate.

Donohue praised both Bernanke and the Fed, which he said gave the U.S. a “very unique strength” in dealing with financial crises compared to other countries.

Donohue said the Chamber is “hopeful” the central bank’s $600 billion plan, referred to as “quantitative easing,” would be successful.

“We’re hopeful that the Fed’s judgments turn out to be very positive for job creation and economic expansion,” Donohue said.