Democratic congressmen urge Waller to maintain eight FOMC meetings per year: concerns about weakening policy response capability

A group of Democratic lawmakers has sent a letter to Federal Reserve Chair Kevin Walsh, expressing concerns about the proposed changes to the schedule of the central bank’s annual policy meetings.

The letter, co-signed by Senators Ruben Gallego, Andy Kim, Chris Van Hollen, Angela Alsobrooks, Elizabeth Warren, Catherine Cortez Masto, and Tina Smith, states:

“We are concerned that reducing the number of meetings will weaken the committee’s ability to respond to rapidly changing economic conditions, and will effectively unilaterally alter how the Federal Reserve communicates with the markets and the American public.”

The letter also says:

“The Federal Reserve’s responsibility is to track economic developments in real time, not lessen its attention and hope for good luck. If the Federal Reserve continues down this increasingly opaque path, it will put the broader economy at risk.”

Minutes from the Federal Reserve’s July policy meeting show that Walsh suggested reducing the number of annual committee policy meetings from 8 to 6.

The lawmakers have posed seven questions to Walsh regarding this proposal and requested that he respond by September 2.

As Walsh pushes for this adjustment, significant internal policy disagreements are emerging within the Federal Reserve. The July meeting maintained the federal funds rate target range at 3.50% to 3.75%, but three officials supported an increase. Meeting minutes indicate that some officials believe further tightening may be needed in the future if inflation continues to exceed the 2% target.