RELEASE: REPS. HILL, DONALDS INTRODUCE BILL TO FOCUS FEDERAL RESERVE ON CURBING INFLATION

Statement

Rep. French Hill (AR-02) and Rep. Byron Donalds (FL-19) introduced the Price Stability Act to end the Federal Reserve's dual mandate and ensure that the central bank focuses its efforts exclusively on containing inflation. The bill's introduction comes on the heels of February's Consumer Price Index report indicating that prices have gone up 7.9 percent over the last year.

"The Fed should focus exclusively on containing inflation and steer clear of economic policy fads and calls for an expanded mission. As prices continue to rise, it's time for Congress to reassess the central bank's core mission and consider a mandate focused on keeping prices in check for the American people at the gas pump, in the grocery store, and any time they pull out their wallet," said Rep. Hill. "As a former commercial banker and Treasury official, I am pleased to introduce this bill to provide relief to central Arkansans, and I thank my friend, Rep. Byron Donalds, for joining me in introducing this bill."

"The mounting failures of the Biden administration are having a devastating impact on the nation. With consumer prices soaring across the board and inflation jumping nearly 8% in a year, the sole focus of the Federal Reserve should be protecting the purchasing power of the US dollar," said Congressman Donalds. "I'm excited to partner with Congressman French Hill on this legislation to realign the Federal Reserve's priorities with the needs of the American people."

Further Background:

This legislation would amend the Federal Reserve Act, so the Federal Reserve Board of Governors and the Federal Open Market Committee has a single mandate to maintain stable prices.

In light of a new generation of threats to politicize the Fed and follow the academic fad known as Modern Monetary Theory, Congress should reassess the central bank's mandate. Were a single mandate to be adopted in the United States, it would be in line with that of European Central Bank, the Swiss National Bank, Bank of Japan, and the Bank of Canada, among others.

During the height of the dysfunctional fiscal and monetary policy that created stagflation over forty years ago, Congress gave the Federal Reserve its current statutory mandate to promote "maximum employment, stable prices, and moderate long-term interest rates." Yet as Arthur Burns warned as he reflected on his time as Federal Reserve Chairman during the 1970s, "Much of the expanding range of government spending was prompted by the commitment to full employment. Fear of immediate unemployment--rather than fear of current or eventual inflation, thus came to dominate economic policymaking."

Source