HR 5396119th CongressIntroduced

Price Stability Act of 2025

Introduced: Sep 16, 2025

Financial Services

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Price Stability Act of 2025 would amend the Federal Reserve Act to remove the requirement that the Federal Reserve’s Board of Governors and the Federal Open Market Committee pursue maximum employment. Instead, the Fed would be instructed to focus only on price stability. In effect, the bill would convert the current dual mandate (maximum employment and price stability) into a single mandate: price stability. The bill was introduced in the House on September 16, 2025 by Rep. Hill of Arkansas, with cosponsors Rep. Stutzman and Rep. Donalds, and referred to the Committee on Financial Services. It amends 12 U.S.C. 225a (Section 2A) to strike the phrase “maximum employment, stable prices” and replace it with “stable prices.”

Key Points

1Amends Section 2A of the Federal Reserve Act to remove the explicit requirement to pursue maximum employment, replacing it with a single mandate of price stability (i.e., keeping inflation low and stable).
2Eliminates the current dual mandate that has guided monetary policy decisions for the Fed’s Board of Governors and the FOMC.
3The bill is titled the “Price Stability Act of 2025,” introduced in the House, with Rep. Hill of Arkansas as sponsor and cosponsors Rep. Stutzman and Rep. Donalds; referred to the Committee on Financial Services.
4The text provided contains only the mandate change and does not add new tools, criteria, or procedures for how price stability should be pursued.
5No definitions of “price stability” are included in the bill itself; definitions would likely rely on standards used by the Fed or future Congress.

Impact Areas

Primary group/area affected- The Federal Reserve (Board of Governors and the Federal Open Market Committee) would operate under a single statutory objective: price stability, potentially altering how monetary policy is set and communicated.Secondary group/area affected- Financial markets, lenders, borrowers, and investors who respond to monetary policy signals; expectations about inflation and policy stance could shift.- Labor market and workers, since outcomes for unemployment and job growth can be affected by the trade-offs policymakers make between inflation and employment.Additional impacts- Economic stability and growth dynamics: removing the employment objective could influence the Fed’s sensitivity to employment conditions, potentially changing short-term labor market outcomes during inflation episodes.- Congressional oversight and monetary policy credibility: altering the mandate could affect the perceived independence and priorities of the central bank, with broader implications for inflation expectations and long-run economic performance.

Generated by gpt-5-nano on Oct 2, 2025