The myth of congressional supervision of monetary policy

The 1975 House Concurrent Resolution 133 required the Federal Reserve to appear regularly before the Senate and House Banking Committees to present its objectives on the ranges of growth or diminution of monetary and credit aggregates. Despite this mandate, there has been no revolution in Congressional oversight of monetary policy. Congress has exercised little influence over monetary policy. The Federal Reserve has not shifted its actual policies to control the monetary aggregates but has succeeded in sidestepping the intent of the Congressional Resolution. Evidence indicates the Federal Reserve has placed greater reliance on stabilizing the money market, at times at the cost of losing control over the monetary aggregates, since the resolution was passed. Congress should not attempt to execute monetary policy but must become more concerned with basic monetary policy decisions that are vital to the national welfare.