Overnight Finance: Yellen defends Fed's independence

TOMORROW STARTS TONIGHT - - JANET YELLEN FACES CONGRESS. The Hill's Pete Schroeder was in the room: "Federal Reserve Chairwoman Janet Yellen is mounting a staunch defense of the Fed's policies before a skeptical Republican Senate panel Tuesday. Appearing before the Senate Banking Committee, Yellen gave little sign that the Fed is getting closer to raising rates for the first time since the financial collapse. She suggested, instead, that the economy would still benefit from extremely low interest rates... "Yellen's testimony Tuesday is her first before a Congress fully controlled by Republicans, many of whom are highly critical of the direction the Fed has taken since the financial meltdown of 2008. Her appearance also comes as markets are intensely watching every move from the Federal Reserve, trying to discern when the central bank will decide to again increase interest rates, having wrapped up its final round of stimulus at the end of 2014." In her own words: -- YELLEN ON INTEREST RATES: "Despite [economic] improvement, too many Americans remain unemployed and underemployed, wage growth is still sluggish, and inflation remains well below our longer-run objective." Story: http://bit.ly/1wlQ1IZ -- YELLEN ON FED TRANSPARENCY: "Central bank independence in conducting monetary policy is considered a best practice for central banks around the world. Academic studies, I think, establish beyond the shadow of a doubt that independent central banks perform better." http://bit.ly/1AHGEln -- WARREN VERSUS YELLEN: Sen. Elizabeth Warren (D-Mass.) grilled Yellen for not disclosing public data after a recent leak of proprietary information. Warren said during the hearing: "Apparently, there have been no consequences for the most recent leak. No action has been taken" [after a subsequent internal Fed investigation]. Craig Torres for Bloomberg: http://bloom.bg/1A3ZvTH THIS IS OVERNIGHT FINANCE. It's Tuesday. Tweet: @kevcirilli; email: kcirilli@thehill.com; and subscribe: http://thehill.com/signup/48. Have a good Tuesday night. VETO ALERT - - OBAMA VETOES KEYSTONE. Laura Barron-Lopez for The Hill: "President Obama on Tuesday vetoed legislation authorizing construction of the Keystone XL pipeline, rebuffing the new Republican Congress amid a furious battle over Homeland Security funding." http://bit.ly/1wlpN9p YELLEN SAYS NO TO CURRENCY MANIPULATION, via Vicki Needham: Federal Reserve Chairwoman Janet Yellen told lawmakers on Tuesday that she would have a significant problem with adding currency manipulation provisions into global trade agreements. "Yellen said monetary policy decisions -- such as the massive stimulus programs at the Fed since the 2008 financial crisis -- can affect currency exchange rates but don't amount to currency manipulation." http://bit.ly/17UJSYn DHS SHUTDOWN WATCH - - > The Hill's Rebecca Shabad has every angle covered: "Senate Democrats demanded Tuesday that congressional Republicans agree to a 'clean' Department of Homeland Security (DHS) bill in light of heightened terror threats, including a new one to attack Western malls. "'I call on our Republican friends to get this bill done, to get these firefighters funded, to fund our security and not to send a message to al-Shabaab that we're going to shut down Homeland Security. That cannot be what is coming from the people of America,' Sen. Amy Klobuchar (D-Minn.) said at a press conference with the rest of the Senate Democratic Caucus." "Klobuchar said her constituents woke up on Sunday to a video released by Somali terrorist group al-Shabaab in which it threatened to attack the Mall of America in their home state, as well as a mall in Canada and a mall in London." http://bit.ly/1Gqh2Lz WHAT WILL GOP DO? From The Hill's Alexander Bolton: "Senate Majority Leader Mitch McConnell (R-Ky.) on Tuesday said the Senate may vote 'very quickly' on a clean Department of Homeland Security funding bill. Days before a shutdown of the critical agency, McConnell said he would 'be happy' to pass a clean DHS funding bill before the Senate considers a narrow measure overturning President Obama’s most recent executive actions on immigration." http://bit.ly/17UTgLt OBAMA, WARREN TAKE ON WALL STREET. Pete Schroeder and me for the hometown paper: "For the first time in his second term, President Obama is picking a fight with Wall Street. With Sen. Elizabeth Warren (D-Mass.) by his side, Obama announced Monday at AARP's Washington headquarters that he is moving ahead with new regulations on financial advisers that are vehemently opposed by the business community." "Obama is seizing the populist mantle as the likely 2016 Democratic nominee, Hillary Clinton, is coming under intense pressure to take a stand against the captains of finance. Much of that pressure is being channeled into efforts to draft Warren, a critic of Wall Street, into the presidential race." "Business groups lined up against the plan on Monday, warning it would radically change the industry's payment system and make it harder for low-income Americans to obtain financial advice. The push for the new regulations on investment advisers also stirred angst among centrist Democrats. "'Americans are going to be shocked when the only advice they have available to them is Jim Cramer on CNBC,' griped one Democratic financial services industry insider who works with big businesses." http://bit.ly/17uDd78 THE HILL EXCLUSIVE - - OBAMA OP-ED: "Our immigration system has been broken for decades. Our country deeply values fairness, but our immigration system has become unfair to businesses, workers and families alike." http://bit.ly/1DNLwsI WARREN, CUMMINGS TEAM UP, via me: "Sen. Elizabeth Warren (D-Mass.) blasted the new Republican Congress on Tuesday, arguing they are risking a partial shutdown of the Department of Homeland Security (DHS) at a time when the middle class is getting 'hammered.' "Warren made the remarks during an appearance on MSNBC's 'Morning Joe' with Rep. Elijah Cummings (D-Md.), where they announced a new political partnership to examine economic policies to address income inequality, among other issues. -- WARREN ON 'MORNING JOE:' "Republicans are now in charge and what have they spent their time on? First, they wanted to spend weeks on a pipeline that would principally benefit some foreign oil company, and now they want to spend a month on shutting down Homeland Security at a time when we face terrorist threats." http://bit.ly/17vDKpr Write us with tips, suggestions and news: vneedham@thehill.com; pschroeder@thehill.com; bbecker@thehill.com;rshabad@thehill.com; kcirilli@thehill.com. --Follow us on Twitter: @VickofTheHill; @PeteSchroeder; @BernieBecker3; @RebeccaShabad and @kevcirilli.