Monetary Policy, Return to Normal? Senator Toomey vs Fed Chair (video)

Senator to Yellen: Forget stock drop, normalize (CNBC - 11 Feb 2016): Sen. Pat Toomey [(R) Pennsylvania] said the Federal Reserve should continue moving monetary policy back to normal, despite the swings in the financial markets. "I'm going to try to be a voice for encouraging a normalization," Toomey told CNBC's "Squawk Box." The Pennsylvania Republican is member of Senate Banking Committee, where Fed Chair Janet Yellen appeared before the Committee in the second part of her semiannual testimony on the economy.

In testimony before the House Committee on Financial Services, Yellen kept her options open to further hike interest rates while acknowledging the financial market turmoil and concerns about China. "We shouldn't be shocked that some asset prices have a little bit of a rough ride along the way," Toomey said.

"We've got a Fed that's just been winging it by the seat of their pants … in one direction right, this unbelievable accommodative policy, this unprecedented policy, which I think is very dangerous," Toomey said. He contended that the Fed's stated goal was to boost asset prices with easy money, so it stands to reason that tighter policy could reverse things a bit.

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