US House Weighs Bill to Make Price Stability Fed’s Sole Mandate
Forecast Trend Report by Period
The U.S. House of Representatives is considering legislation to scrap the Federal Reserve’s dual mandate, a move that could reshape the central bank’s policy framework.
Nick Timiraos of The Wall Street Journal reported on May 13 that the House Financial Services Committee is reviewing an amendment to the Federal Reserve Act.
The bill would remove the Fed’s employment objective from its current dual mandate of maximum employment and price stability.
Specifically, the measure would strike the phrase “maximum employment, stable prices” from Section 2A of the Federal Reserve Act and leave only “stable prices.”
Timiraos wrote that it is worth considering whether the Fed would have cut interest rates last year if the bill had already been in effect.
The Fed currently operates under a policy framework that takes both employment and inflation into account.
Markets are watching how any attempt to change the Fed’s mandate could affect future rate policy and financial markets. Whether the bill advances, and the broader debate over Fed independence, remain key variables.
JH Kim
reporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
