TOO LATE Act

This bill sets clear rules for when the President can remove the Chair of the Federal Reserve. If the Fed’s key interest rate (the federal funds target rate) is more than 2 percentage points away from the average of certain economic benchmarks for two straight quarters, the President may remove the Chair. Those benchmarks include measures of inflation (like the personal consumption expenditures price index), the gap between regular 5-year Treasury bonds and inflation-protected bonds, and comparisons of unemployment estimates to Congressional Budget Office projections. If removal is considered, the President must publish a detailed explanation and send it to Congress, and Congress must hold hearings within 30 days. The bill also defines the “federal funds target rate” as the upper end of the Fed’s target range for that rate .

Key points:

• Who is affected: The Federal Reserve Chair, the President, and Congress; indirectly, households and businesses that rely on interest rates for loans and savings.
• What changes: Creates a measurable trigger for removing the Fed Chair if the interest rate strays too far from listed benchmarks for two quarters; requires a public justification and quick congressional hearings .
• Why it matters: Aims to increase accountability and transparency in how the Fed sets interest rates, which can affect mortgage costs, credit card rates, and savings returns.