Federal Reserve Transparency Act of 2025
Summary
The Federal Reserve Transparency Act of 2025 mandates a full audit of the Board of Governors of the Federal Reserve System and the Federal Reserve banks by the Comptroller General of the United States. This audit must be completed within 12 months of the Act's enactment. A report detailing the audit's findings and recommendations must be submitted to Congress and made available to key members and committees within 90 days of completion.
Expected Effects
The Act aims to increase transparency and accountability within the Federal Reserve System. By repealing certain limitations on audits, it allows for a more comprehensive review of the Fed's operations. This could lead to greater public understanding of monetary policy and potentially influence future legislative or administrative actions related to the Federal Reserve.
Potential Benefits
- Increased transparency of the Federal Reserve System.
- Greater accountability of the Board of Governors and Federal Reserve banks.
- Potential for improved monetary policy based on audit findings.
- Enhanced public understanding of the Federal Reserve's operations.
- Opportunity for legislative or administrative action based on audit recommendations.
Most Benefited Areas:
Potential Disadvantages
- Potential for political interference in the Federal Reserve's operations.
- Risk of misinterpreting audit findings, leading to misguided policy changes.
- Possible delays in implementing necessary monetary policy due to audit requirements.
- The cost of conducting the audit may be significant.
- The audit may reveal sensitive information that could undermine market confidence.
Constitutional Alignment
The Act aligns with the principle of Congressional oversight as outlined in Article I, Section 8 of the US Constitution, which grants Congress the power to coin money and regulate its value. By mandating an audit and report to Congress, the Act reinforces Congress's role in overseeing the Federal Reserve, which is responsible for implementing monetary policy. The Act does not appear to infringe upon any specific constitutional provision.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).