The Federal Reserve is a creation of the legislature, not the Constitution. Congress is trying to reassert its control. The latest reports indicate that the Republicans, which enjoy a majority in both chambers, will call for a vote tomorrow on the Fed Oversight Modernization and Reform Act.
There are three measures in the bill that have in particular raised the ire of the White House and Fed Chair Yellen. First, the bill requires that the Fed a mathematical formula, like the Taylor Rules, to set short-term interest rates. Second, the bill would limit the emergency powers that the Fed claimed during the crisis. Third, the bills require the Government Accountability Office to review monetary policy decisions.Marc to Market
Democratizing the Fed or Politicizing Monetary Policy?
Marc Chandler
