The Congress, in effect, recognized the principle of instrument independence by requiring that the Federal Reserve Board report semiannually directly to the Congress about the Board’s and the FOMC’s plans to meet these objectives and by exempting monetary policy from Government Accountability Office (GAO) review as part of the Full Employment and Balanced Growth Act of 1978.
By passing these two pieces of legislation, the Congress put in place a mechanism for holding the Fed accountable for meeting its statutory mandate. A key venue for reviewing the Fed’s approach to pursuing its mandated goals remains the semiannual testimony of the Chair, along with the associated Monetary Policy Report.