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The House Committee voted to advance the Pentagon’s annual spending bill; Speaker Ryan announced House Republicans will vote next week on two bills aimed at addressing the fate of DACA recipient; Fed increases rates as expected; Inflation rose at the fastest rate in six years.
Through an examination of Vice Chairman Randal Quarle’s re-nomination, Faculty Affiliate Peter Conti-Brown reflects on the need for a restoration of “political accountability and independence to the Federal Reserve.” He claims that the partisan influence over the functionality of the Fed as well as the actions of the President and Senate all serve as competing narratives that obstruct the organization’s ability to successfully fill vacancies.
Both Republicans and Democrats on the Senate Health Committee urge Trump to implement mental health parity requirements; As the construction of multi-family housing units rebounded, U.S. home building increased in March as well; Industrial production in March rose 0.5%.
The Federal Reserve lifted the federal funds rate on Wednesday by a quarter percentage point to a range of 1.5 percent to 1.75 percent.
Faculty Affiliate Susan Wachter comments on how this rate hike affects mortgages. ““I do see a 5 percent and even a 6 percent rate coming, a year or two out,” she says. “And that, amazingly enough, takes us back to normal. We’ve been living in a world where mortgage rates have been incredibly low.”
The likely elevation of San Francisco Fed President John Williams to lead the New York Fed has sparked a degree of public criticism rarely seen in the relatively obscure world of regional central bank chiefs.
Faculty Affiliate Peter Conti-Brown says central bankers and their allies claim “we get the best quality people” for the job, but it is a closed process.
He continues, suggesting one possible reform among several paths would be for Fed banks in search of a new chief to announce a short list of candidates, which could be done without any legal changes to the law that authorizes the Fed.