Sponsors
The bill increases transparency and objective checks on removing a Fed Chair—strengthening accountability—but risks politicizing the Fed, raising market volatility and borrowing costs, and deterring qualified leaders.
Taxpayers, federal employees, and the public would get more transparency and congressional oversight because the President must publicly justify any removal of the Fed Chair with benchmark data and trigger committee hearings within 30 days.
Federal employees and financial institutions would face clearer, objective criteria (a 200 bps deviation vs. specified benchmarks) that can limit arbitrary or purely political removals of the Fed Chair.
Middle-class families and taxpayers could benefit if increased scrutiny of monetary policy leads to better accountability for inflation and employment outcomes that affect household purchasing power.
Financial institutions and middle-class families face a risk that tying removal authority to politically influenced benchmarks will enable partisan interference with Fed independence, destabilizing monetary policy.
Households and businesses could experience increased market volatility and higher borrowing costs if investors fear Fed leadership changes driven by political cycles rather than economic judgment.
State governments and financial institutions could face slower or disrupted policy responses because the bill politicizes technical benchmark choices and invites disputes between agencies over which data to use.
Based on analysis of 2 sections of legislative text.
Authorizes the President to remove the Fed Chair if the federal funds target rate deviates by >200 basis points for two consecutive quarters from specified benchmarks, and requires a public justification and hearings.
Introduced August 15, 2025 by Buddy Carter · Last progress August 15, 2025
Creates a new statutory trigger that lets the President remove the Chair of the Board of Governors of the Federal Reserve if the federal funds target rate for two consecutive quarters differs by more than 200 basis points from an average calculated from two of three specified economic benchmarks. It also requires the President to submit a public justification with benchmark data and forces the House Financial Services and Senate Banking Committees to hold hearings within 30 days after that statement. The benchmarks cited are the PCE implicit price deflator (an inflation measure), the spread between 5‑year nominal yields and 5‑year TIPS (a market inflation expectation proxy), and the difference between the Board’s unemployment estimate and the CBO projection (a labor market gap). The federal funds target rate is defined as the upper bound of the FOMC’s target range for comparison purposes.