I 
108TH CONGRESS 
1ST SESSION H. R. 2547
To mandate price stability as the primary goal of the monetary policy of 
the Board of Governors of the Federal Reserve System and the Federal 
Open Market Committee. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 19, 2003
Mr. SAXTON introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To mandate price stability as the primary goal of the mone-
tary policy of the Board of Governors of the Federal 
Reserve System and the Federal Open Market Com-
mittee.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Price Stability Act of 
2003’’. 
SEC. 2. CONGRESSIONAL FINDINGS. 
The Congress hereby finds the following:
(1) Price stability provides the essential founda-
tion for sustainable long-run economic and employ-
ment growth. 
(2) Price stability enables the price system (the 
information or signaling mechanism of market 
economies) to function most effectively by directing 
resources to their most beneficial use. 
(3) Price stability provides a reliable anchor for 
the price system so that comparative values can be 
established and accurately measured. 
(4) Price stability works to lower interest rates 
and stabilize financial markets. 
(5) Price stability serves to promote trans-
parency, accountability, and credibility in monetary 
policy. 
(6) A more open and transparent formulation 
of monetary policy by the Board of Governors of the 
Federal Reserve System is, in turn, an essential in-
gredient for pursuing and maintaining price sta-
bility. 
SEC. 3. PRICE STABILITY AS OVERRIDING GOAL OF MONE-
TARY POLICY. 
(a) DECLARATION OF POLICY.—
(1) IN GENERAL.—Notwithstanding any other 
provision of law, the primary and overriding goal of
the Board of Governors of the Federal Reserve Sys-
tem (hereafter in this section referred to as the 
‘‘Board’’) and the Federal Open Market Committee 
(hereafter in this section referred to as the ‘‘Com-
mittee’’) with regard to monetary policy shall be the 
achievement of price stability. 
(2) PREEMINENCE OVER OTHER GOALS.—Para-
graph (1) shall not be construed as altering or af-
fecting any other goal of monetary policy established 
under Federal law or by the Board except to the ex-
tent any such goal conflicts with, or is otherwise in-
consistent with, the goal of achieving price stability. 
(3) TEMPORARY SUSPENSION IN EVENT OF WAR 
OR
ECONOMIC
EMERGENCY.—The Board and the 
Committee may suspend the applicability of para-
graph (1) for a period not to exceed 90 days if the 
Committee, by a majority vote, and the President 
jointly determine that such suspension is necessary 
and appropriate and in the public interest due to 
war or an economic emergency. 
(b) DEFINITION
OF PRICE STABILITY GOAL RE-
QUIRED.—
(1) IN GENERAL.—The Board and the Com-
mittee shall establish a definition of the goal of price 
stability.
(2) CRITERIA.—The Board and the Committee 
shall implement the definition of price stability es-
tablished pursuant to paragraph (1) through infla-
tion targets. 
(c) TIMEFRAME.—The Board and the Committee 
shall specify an appropriate timeframe for achieving price 
stability. 
(d) FALL-BACK OPTIONS.—The Board shall deter-
mine in advance what action the Board will take if the 
goal of fully achieving price stability is not met within the 
timeframe established by the Board and the Committee 
under subsection (c).
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