Rather, this proposal to strike that exemption for monetary policy is an attempt to reduce the independence of the central bank through the threat of a political action in real time. For example, under the provisions of the bill, the GAO could be called on to investigate a monetary policy decision whenever any member of Congress opposes a decision to change interest rates.
This possibility would change the dynamics of the FOMC’s internal discussions and undermine the Fed’s credibility and its ability to conduct monetary policy in the long-term interests of the American public. Over the past 30 years, many countries have acted to increase the degree of independence of monetary policymaking from short-term political influences. In a democracy, though, independence must be accompanied by accountability.