Janet L. Yellen, the Federal Reserve chairwoman, delivered a strong rebuttal on Friday to Republican criticism that financial regulation is impeding economic growth. In a speech that amounted to a warning to the Trump administration, Ms. Yellen said that people were forgetting the lessons of the crisis that began a decade ago….
Karen Shaw Petrou of Federal Financial Analytics, a regulatory policy consulting firm, described the comments as a watershed moment for the Fed. Historically, she said, Fed officials have deferred to politicians on regulatory issues to preserve the Fed from a backlash that might limit its independence to make monetary policy. “I think the Fischer-Yellen counterattack is unprecedented in its openness, and signals the strong commitment since the crisis by the Fed — at least this board — to a new dual mandate: macroeconomic growth and financial stability,” she said. Mario Draghi, the president of the European Central Bank, joined the chorus in a lunchtime address. “There is never a good time for having lax regulation,” he said. “Any reversal would call into question whether the lessons of the crisis have indeed been learned.”