Twice a year, the Fed chairman presents the Fed's views on the economy and monetary policy. This tradition began in 1978 when U.S. Senators Humphrey and Hawkins sponsored the Full Employment and Balanced Growth Act of 1978. This Congressional Act directed the Fed "to promote effectively the goals of maximum employment, stable prices, and moderate long term interest rates."

In passing this Act, Congress declared that it would monitor the actions of the Federal Reserve Board. As a result, the Federal Reserve chairman was commissioned to testify before Congress each February and July. At his testimony before the Senate Committee on Banking, Housing, and Urban Affairs and House Financial Services Committee, the chairman sums up the views of the Fed governors and regional bank presidents on current economic conditions and presents composite forecast ranges for various economic variables that depict economic growth and inflation. Real (inflation-adjusted) GDP growth, the civilian unemployment rate, and the headline PCE inflation, and core PCE inflation are predicted for the current year and following two years. The Fed no longer publishes monetary growth targets.

The Humphrey-Hawkins Act actually expired in the late 1990s but the Federal Reserve Act was amended to require semiannual testimony by the Fed chairman on or about February 20 and July 20 of each year.

Both the testimony for Humphrey-Hawkins and testimony for the Monetary Policy Report to the Congress have been important for investors and traders. In the 1980s, the Fed did not announce any changes in policy immediately at the end of FOMC meetings. Therefore, Chairman Volcker's testimony was important during his reign as Fed chairman. Markets would try to interpret his comments as pointing to new policy changes or not. Even today, with greater Fed transparency (FOMC announcement at the end of the meeting followed by the Chairman's News Conference and FOMC minutes a mere three weeks later), markets still glean new information from the Chairman's semiannual testimony. Recently, investors have paid close attention to any commentary on the health of financial markets, the status of housing, and whether inflation pressures are building.

As part of the Fed's trend toward greater transparency, the Fed not only presents its economic forecasts in the Monetary Policy Report to Congress in February and July but also on a quarterly basis later in the day after the release of the FOMC statements in March, June, September, and December.