HR 5396119th CongressIn Committee

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 current statutory mandate that the Federal Reserve pursue both maximum employment and stable prices. Instead, the Fed would be required to prioritize only price stability. In practical terms, the Board of Governors and the Federal Open Market Committee (FOMC) would be guided by a single objective—keeping inflation low and stable—rather than balancing inflation with employment goals. The bill is a short, textual change (no new policy tools or procedures are specified) and is currently introduced in the House and referred to the Committee on Financial Services; it has not become law.

Key Points

1Important provision 1: Removes the dual mandate. Section 2A of the Federal Reserve Act would strike “maximum employment, stable prices” and replace it with “stable prices” only, eliminating the statutory employment objective.
2Important provision 2: Keeps the mandate to pursue price stability. The Fed’s statutory objective would be limited to maintaining stable prices (low and predictable inflation).
3Important provision 3: Applies to the main policy bodies. The change affects the Board of Governors and the Federal Open Market Committee (FOMC), which are responsible for setting monetary policy.
4Important provision 4: Legislative status. The bill is introduced in the House (H.R. 5396), sponsored by Mr. Hill (and co-sponsors), and referred to the Committee on Financial Services; it has not advanced or become law.
5Important provision 5: No defined mechanism for “price stability.” The text does not specify how price stability should be measured, targeted, or achieved, nor any transition rules or interim safeguards.

Impact Areas

Primary group/area affected: Federal Reserve policymakers (Board of Governors and FOMC) and financial/economic policy, with potential downstream effects on financial markets, borrowers, savers, and workers.Secondary group/area affected: Employers and wage dynamics, since the change could influence how monetary policy weighs inflation versus employment in practice; inflation expectations and long-term interest rates may respond to shifts in mandate.Additional impacts:- Policy trade-offs: With a single objective, the Fed could be perceived as prioritizing inflation control over employment considerations, potentially affecting unemployment levels in the short term depending on policy choices.- Credibility and expectations: Markets and households may reassess inflation expectations based on a clearer, singular mandate, which could influence 투자 decisions, lending, and wage negotiations.- Legal/constitutional implications: This is a statutory change; its interpretation and legal interplay with other economic objectives would rely on subsequent Congressional actions and judicial interpretation if challenged.

Generated by gpt-5-nano on Oct 8, 2025