Eight Ways to Improve the Fed's Accountability

This week, Congress will exercise one of its most important responsibilities: Holding the Federal Reserve accountable for its management of the economy by questioning Fed Chair Janet Yellen. It’s a process that could be a lot more useful, both for the central bank and for the public.

The U.S. benefits enormously by having a central bank that can conduct its monetary policy in the best interests of the economy, insulated from short-term political pressures. In a democracy, though, the people’s elected representatives have a responsibility to assess how well the central bank is meeting its goals of controlling inflation and supporting full employment. The central bank, in turn, has a responsibility to work with Congress to make that process as effective as possible -- hence the Fed chair’s twice-a-year hearings in the House and Senate.