Working Group on Economic Policy: WP14111
This testimony reviews my analysis and evaluation of the legislation, “Requirements for Policy Rules for the Federal Open Market Committee” (Section 2 of The Federal Reserve Accountability and Transparency Act). The legislation takes account of research on the practical experiences with monetary policy. It incorporates different views about the instruments and transmission process while maintaining the principle that central bank decisions should be based on strategy or a rule with limits placed on discretion and excessive intervention in a transparent and accountable way. It builds on lessons learned from earlier legislative initiatives requiring reporting on the monetary policy instruments, including the requirement to report ranges for the monetary and credit aggregates which were removed from the Federal Reserve Act in 2000.