Fed chairman slams report on China

Federal Reserve Chairman Jerome Powell on Tuesday strongly pushed back against a United States Senate report that alleges China tried to obtain sensitive internal information and build a network of influence and informants inside the central bank.

Ohio Senator Rob Portman published the report on Tuesday by Republican staff members of the Homeland Security and Governmental Affairs Committee alleging that China has targeted economists working for the Fed to access insider information for more than a decade. Portman is the top Republican on the committee and a prominent critic of Chinese activity overseas.

“I am concerned by the threat to the Fed,” Portman said.

In a letter to Portman on Tuesday, Powell cited “strong concerns about assertions and implications in the report”.

He defended the report’s allegations about specific staff members, while casting doubt on the report.

“We are confident that Federal Reserve staff understand their obligations and are committed to maintaining both the confidentiality of sensitive information and the integrity of our workforce,” Powell said.

“We would be concerned about any supportable allegation of wrongdoing, whatever the source,” Powell wrote. “In contrast, we are deeply troubled by what we believe to be the report’s unfair, unsubstantiated, and unverified insinuations about particular individual staff members.”

Powell highlighted the vital importance of economic research for central banks, noting that its economists frequently collaborate with scholars elsewhere.