I 

115TH CONGRESS 

1ST SESSION H. R. 4270 

To amend the Federal Reserve Act to ensure transparency in the conduct 

of monetary policy, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 7, 2017 

Mr. BARR introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To amend the Federal Reserve Act to ensure transparency 

in the conduct of monetary policy, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Monetary Policy 

5 Transparency and Accountability Act of 2017’’. 

6 SEC. 2. MONETARY POLICY TRANSPARENCY AND ACCOUNT7 ABILITY. 

8 Section 12A of the Federal Reserve Act (12 U.S.C. 

9 263) is amended— 


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1 (1) by redesignating subsections (b) and (c) as 

2 subsections (d) and (e), respectively; and 

3 (2) by inserting after subsection (a) the fol4 lowing new subsections: 

5 ‘‘(b) POLICY TRANSPARENCY.— 

6 ‘‘(1) MONETARY POLICY STRATEGY.— 

7 ‘‘(A) IN GENERAL.—The Committee shall 

8 annually establish exactly 1 monetary policy 

9 strategy, which shall serve as a non-technical 

10 public communication of the Committee’s con11 sensus expectation for the conduct of monetary 

12 policy during that calendar year. 

13 ‘‘(B) REQUIREMENTS.—Each monetary 

14 policy strategy of the Committee shall include 

15 the following: 

16 ‘‘(i) A plain English description of 

17 how the Committee would adjust each of 

18 the following monetary policy instruments 

19 in reaction to changes in a small and well20 defined set of publicly available economic 

21 indicators: 

22 ‘‘(I) Short-term interest rate tar23 gets established by the Committee. 

24 ‘‘(II) Open-market operations au25 thorized under section 14. 


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1 ‘‘(III) Earnings on balances 

2 maintained at a Federal reserve bank 

3 by or on behalf of a depository institu4 tion under section 19(b)(12). 

5 ‘‘(ii) An identification of 1 monetary 

6 policy instrument from the list in clause (i) 

7 that the Committee expects to use as the 

8 primary instrument for implementing the 

9 monetary policy strategy described under 

10 subparagraph (A). 

11 ‘‘(2) REFERENCE MONETARY POLICY RULES.— 

12 In addition to the monetary policy strategy required 

13 under paragraph (1), the Committee shall annually 

14 adopt at least 1 and not more than 3 reference mon15 etary policy rules, each of which shall mathemati16 cally express how the primary monetary policy in17 strument identified under paragraph (1)(B)(ii) re18 acts to changes in a small and well-defined set of 

19 publicly available economic indicators. 

20 ‘‘(3) DEVIATIONS.—Nothing in this subsection 

21 shall be construed to prevent the Committee from 

22 setting short-term interest rate targets, conducting 

23 open-market operations, or paying earnings on bal24 ances pursuant to section 19(b)(12) in a manner 

25 that deviates from a monetary policy strategy or any 


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1 reference monetary policy rules established under 

2 this subsection. 

3 ‘‘(c) TESTIMONY AND REPORTS OF THE CHAIR4 MAN.—The Chairman shall, concurrent with each semi-an5 nual hearing required under section 2B, submit a report 

6 to the Committee on Banking, Housing, and Urban Af7 fairs of the Senate and the Committee on Banking and 

8 Financial Services of the House of Representatives, con9 taining— 

10 ‘‘(1) a statement as to whether the monetary 

11 policy strategy established under subsection (b)(1) 

12 qualitatively differs from any of the reference mone13 tary policy rules required under subsection (b)(2) 

14 and, if applicable, a full and non-technical expla15 nation of any such difference; 

16 ‘‘(2) a statement as to whether the Committee’s 

17 conduct of monetary policy since the previous report 

18 quantitatively differs from any reference monetary 

19 policy rule and, if applicable, a full and non-tech20 nical explanation of any such differences; and 

21 ‘‘(3) a description of— 

22 ‘‘(A) the circumstances under which the 

23 Committee’s monetary policy strategy may be 

24 amended from year to year; and 


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1 ‘‘(B) a full and non-technical explanation 

2 of any such actual amendment.’’. 

Æ 


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