(Reuters) - White House hopeful Ted Cruz slammed the U.S. Federal Reserve during the Republican presidential debate on Wednesday night, saying the central bank should be audited and should move to a monetary system backed by gold.
Cruz, a U.S. senator from Texas who is among the candidates seeking the Republican nomination for the November 2016 election, said during the debate in Boulder, Colorado, that the Fed’s actions have benefited Wall Street but hurt ordinary families.
“On Wall Street, the Fed is doing great. It’s driving up stock prices,” Cruz said. “I think the Fed should get out of the business of trying to juice our economy and simply be focused on sound monetary and monetary stability, ideally tied to gold.”
Fed critics say the central bank risked sparking inflation with its policies in response to the global financial crisis, and they want the bank to raise interest rates.
Fed officials say their independence is critical to making sound policy decisions. On Wednesday, the Fed said it was keeping interest rates unchanged, but officials indicated a hike could come in December.
The gold standard, or linking currency values to gold, gained attention in conservative circles when former U.S. Representative Ron Paul of Texas made it a focus of his 2012 presidential campaign. Economists say the move could lead to more financial panics.
Paul’s other major proposal, to allow audits of Fed monetary policy decisions, has gotten some traction. Paul’s son, U.S. Senator and White House hopeful Rand Paul of Kentucky, won support for an audit bill this year from fellow candidates Cruz and U.S. Senator Marco Rubio of Florida.
The younger Paul’s bill has not moved forward in Congress, and the Fed has defenders who want to protect its independence.
Rand Paul on Wednesday bashed former Fed Chairman Ben Bernanke, who wrote in a recently published book that he no longer considered himself a Republican because of the party’s hostility toward the central bank.
“I think it’s precisely because of the arrogance of someone like Ben Bernanke, who now calls us all know-nothings, that’s precisely why we need (to) audit the Fed,” Paul said.
Reporting by Emily Stephenson; Editing by Jonathan Oatis