Democratic lawmakers urge Walsh to maintain FOMC's eight meetings per year: concerned about weakening policy responsiveness

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A group of Democratic lawmakers have written to Federal Reserve Chairman 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 amounts to unilaterally changing the way the Federal Reserve communicates with markets and the American public.”

The letter reads:

“The Federal Reserve's responsibility is to keep pace with economic developments in real time, not to pay less attention and hope for good luck. If the Federal Reserve continues down this increasingly opaque path, it will put the overall economy at risk.”

The minutes of the Federal Reserve's July policy meeting show that Walsh proposed reducing the number of annual committee policy meetings from 8 to 6.

The lawmakers raised seven questions about this proposal to Walsh and requested a response by September 2.

As Walsh pushes for this adjustment, the Federal Reserve is facing significant internal policy divisions. The July meeting maintained the target range for the federal funds rate at 3.50% to 3.75%, but three officials supported raising rates. The meeting minutes show that some officials believe further tightening may be needed in the future if inflation continues to exceed the 2% target.

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