Sponsors
The bill trades clearer, rules-based public accountability of the Fed Chair for increased risk of politicizing monetary policy, greater market volatility, and potential wrongful removal triggers driven by imperfect economic benchmarks and added political burdens.
Taxpayers and federal employees: Increases public accountability by requiring public justification and potential removal if the Fed Chair's federal funds rate target deviates markedly from defined economic benchmarks for two consecutive quarters.
Taxpayers and financial institutions: Replaces vague removal standards with a clearer, rule-based test tied to measurable indicators (PCE inflation, 5-year breakeven inflation, unemployment gap), making the basis for removal more transparent.
Middle-class families and financial institutions: Makes the Fed Chair vulnerable to politically motivated removal for short-term benchmark divergences, risking erosion of central bank independence and politicization of monetary policy.
Financial institutions and taxpayers: Could increase financial market volatility if investors fear the Chair might be removed in response to transient movements in the chosen benchmarks.
Federal employees and financial institutions: The specific benchmarks selected (PCE, 5‑year breakeven, unemployment gap) may imperfectly capture the appropriate policy stance and could produce false triggers for removal.
Based on analysis of 2 sections of legislative text.
Introduced August 15, 2025 by Buddy Carter · Last progress August 15, 2025
Creates a statutory process that allows the President to remove the Chair of the Board of Governors of the Federal Reserve if the Federal funds target rate diverges by more than 200 basis points, for two consecutive quarters, from the average of any two of three specified economic benchmarks. If that trigger occurs, the President must publish a public justification referencing the benchmarks and monetary policy, submit it to Congress, and the House Financial Services Committee and Senate Banking Committee must hold hearings within 30 days to review the rationale.