The Federal Reserve would be required to draft simpler policy strategies to give investors, households and businesses more confidence to make financial decisions under legislation introduced by U.S. Rep. Andy Barr (R-KY) on Wednesday.
The Monetary Policy Transparency and Accountability Act of 2017, H.R. 4270, would also require the Fed to more clearly outline how its policy strategies align with established benchmarks.
“This legislation will result in greater transparency and accountability at the Federal Reserve,” said Barr, the chairman of the House Financial Services Subcommittee on Monetary Policy and Trade.
“A more predictable, strategy-based monetary policy will give investors, entrepreneurs and families more certainty, which will result in greater economic opportunity for all Americans. And importantly, this bill preserves the independence of the Fed to set monetary policy, while ensuring that its strategy is clearly communicated to Congress and the American people,” Barr added.
The congressman recently praised President Donald Trump’s nomination of Jerome Powell as the next Federal Reserve chairman to succeed current Fed Chair Janet Yellen. Powell has served on the Fed’s Board of Governors since 2012. Barr said on Nov. 2 he was encouraged that Powell “has signaled a willingness to reform and streamline overly-burdensome financial regulations.”
Barr also introduced a separate bill, the Taking Account of Bureaucrats’ Spending (TABS) Act, in May, in order to bring the Consumer Financial Protection Bureau (CFPB) into the congressional appropriations process and enhance oversight and transparency.
While the CFPB is funded directly by the Fed, Yellen testified during a House Financial Services Committee hearing last year that the Fed does not oversee the CFPB’s more than $600 million annual budget.