The U.S. House of Representatives on Thursday approved a bill that would make the Federal Reserve set interest rate policy using a mathematical rule, a proposal that has little chance of becoming law given a White House veto threat.
The House approved the Fed Oversight Reform and Modernization Act in a 241 to 185 vote thanks to overwhelming Republican support.
Under the type of policy rule envisioned by lawmakers, the Fed would commit to moving interest rates up or down depending on the readings of economic indicators like the jobless rate and inflation. The rule adopted would be made public and any deviation from it would lead to a congressional audit.
"If the Federal Reserve explained to the public how it made its decisions ... families could better plan for the future," Speaker of the House Paul Ryan, a Republican, said.