How does the government hold the Federal Reserve accountable if the policy frameworks of the Federal Reserve are not legally binding obligations?

Question

In my understanding, policy frameworks provide structured logical, causal relationships between the concepts, available evidence and policy recommendations.

https://www.federalreserve.gov/econres/notes/feds-notes/the-federal-reserves-review-of-its-monetary-policy-framework-a-roadmap-20200827.htm

In early 2019, the Federal Open Market Committee (FOMC or the Committee) launched a comprehensive review of its monetary policy framework (MPF)—the strategies, tools, and communication practices employed by the Federal Reserve to achieve its congressionally mandated goals of maximum employment and price stability.

Not long ago, the Federal Open Market Committee, a committee of the Federal Reserve, launched a review of its policy framework. However, given this is essentially the Federal Reserve reviewing its own policy, how does it insure that the Federal Reserve is held accountable for its action and for failing to act appropriately to pursue it's objective, which is the mandated goals of maximum employment and price stability? Can the government hold it accountable in some other way. If so, how?

Answer 1

The Federal Reserve is subject to oversight by Congress and the Federal Government. Members of the Federal Reserve Board are frequently summoned to testify to Congressional Committees, such as the Committee on Financial Services. There is no schedule for this, but there is more than one such testimony per month on various issues (it increased in the 2008 financial crisis, but decreased in the covid pandemic). Most recently the Semiannual Monetary Policy Report to the Congress by Jerome Powell.

Moreover the Federal Banking Agency Audit Act (1978) allows for the Government Accountability Office to audit the Fed, and there are external audits of the reserve banks, by Deloitte and Touche.

It is not unusual, and entirely proper for an organisation to also have procedures for investigating itself. These processes can find and correct malpractice before it becomes an external issue.

Finally the Executive gives oversight through the Office of the Inspectorate General. Which, for example investigated Medicaid monetary drawdowns that States received from the Federal Reserve System to determine whether they were supported by actual expenditures reported by the States.