Sec. 102. Price stability mandate
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Section 2A of the Federal Reserve Act ( 12 U.S.C. 225a ) is amended— by striking goals of maximum employment, stable prices, and moderate long-term interest rates and inserting goal of long-term price stability ; by striking The Board of Governors and inserting the following: The Board of Governors ; and by adding at the end the following: The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall— define the term long-term price stability for purposes of subsection (a); and establish metrics that the Board and the Committee will use to evaluate whether long-term price stability is being achieved.
In establishing the metrics described under paragraph (1)(B), the Board and Committee shall— take into consideration price indices of goods and services; and evaluate, on an ongoing basis— whether such metrics are comprehensively reflecting price movements in the economy; and whether any price movements not captured by the price indices of goods and services are causing a significant misallocation of capital in the United States economy. The Board and Committee shall, with respect to the evaluation process required pursuant to paragraph (2)(B), monitor— the prices of, and the expected returns from, major asset classes (including equities, residential real estate, commercial and industrial real estate, agricultural real estate, commodities, corporate bonds, State and local government bonds, and other securities) and the allocation of capital in financial markets and the broader economy; the value of the United States dollar relative to other currencies; and the value of the United States dollar relative to gold.
The Board and the Committee shall, with respect to the definition of long-term price stability and the establishment of metrics set pursuant to paragraph (1)— make such definition and metrics available to the public on a website maintained by the Board or the Committee; and each time such definition and metrics are set or revised, issue a report to the Congress stating such definition and metrics. . Section 2B(b) of the Federal Reserve Act ( 12 U.S.C. 225b(b) ) is amended— by striking containing a discussion and inserting the following: containing— a discussion ; by striking the period and inserting a semicolon; and by adding at the end the following: the results of the evaluation process conducted pursuant to section 2A(b)(2)(B); a determination of whether the goal of long-term price stability is being met and, if such goal is not being met, an explanation of why the goal is not being met and the steps that the Board and the Federal Open Market Committee will take to ensure that the goal is met in the future; a description of the main monetary policy instruments used by the Board and the Federal Open Market Committee and a description of the strategy of the Board and the Committee with respect to using such instruments to achieve the goal of long-term price stability; and .
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