Sponsors
The bill increases political accountability and faster congressional scrutiny of the Fed Chair by tying removals to explicit benchmarks, but does so at the risk of politicizing monetary policy and undermining Fed independence, which could raise inflation, recession risk, and market volatility.
Taxpayers and financial institutions gain clearer accountability and transparency because the President must publicly justify any removal of the Fed Chair using specified benchmark data.
Taxpayers receive faster legislative scrutiny because the House Financial Services and Senate Banking Committees are required to hold hearings within 30 days of the President's statement.
Taxpayers and middle-class families face greater risk of higher inflation or recession because the bill weakens Federal Reserve independence, increasing the chance of politically driven monetary policy.
Middle-class families, taxpayers, and financial institutions may experience increased economic volatility if the Fed Chair can be removed for short-term deviations from mechanical benchmarks.
Financial institutions face greater policy uncertainty if the specified benchmarks (PCE, term spread, unemployment gap) conflict or are noisy, potentially producing contentious removal attempts.
Based on analysis of 2 sections of legislative text.
Establishes a statutory removal trigger for the Fed Chair if the federal funds target rate deviates by >200 basis points for two consecutive quarters from averages based on specified economic benchmarks, and requires presidential justification and congressional hearings.
Creates a new statutory ground to remove the Chair of the Federal Reserve if, for two consecutive quarters, the Federal funds target rate differs by more than 200 basis points from an average calculated using any two of three specified economic benchmarks. Requires the President to issue a public justification with benchmark data and policy discussion, and directs the House Financial Services Committee and Senate Banking Committee to hold hearings within 30 days of that statement.
Introduced August 15, 2025 by Buddy Carter · Last progress August 15, 2025