Sen. Richard Shelby, the Republican of Alabama who is also the chairman of the Senate Banking Committee, said Tuesday that he sees the need for reform of the Federal Reserve. In a statement at the opening of a hearing with Fed Chairwoman Janet Yellen, Shelby said how the Fed plans to unwind its $4.5 trillion balance sheet without destabilizing asset prices "remains a mystery." He also said he was concerned that too much of the Fed's power was concentrated in Washington and New York. Shelby has scheduled a hearing next week to discuss options to reform the Fed. The Fed, in a report accompanying Fed Chairwoman Janet Yellen's testimony, said financial vulnerabilities have remained moderate since last summer. The Fed said that valuation pressures are notable in some asset markets, although they have "eased a little" on balance.
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