Federal Reserve Reform Act of 1986

Federal Reserve Reform Act of 1986 - Amends the Federal Reserve Act to place the Secretary of the Treasury on the Federal Open Market Committee.

Changes the term of office of the Chairman of the Board of Governors of the Federal Reserve System from four years to the period ending on January 31 of the first calendar year beginning after the term of the President who appointed the Chairman expires.

Provides that in the event of the absence or unavailability of the chairman, the vice chairman (or in the vice chairman's absence, another member of the Board) may be designated acting chairman.

Provides that the vice chairman shall perform the duties of the chairman until a successor takes office if a vacancy occurs in the office of the chairman.

Provides that in the case of vacancies in both offices chairman and vice chairman, the member of the Board with the most years of service shall perform the duties of the chairman until a successor takes office.

Changes from 14 years to seven years the term of office of members of the Federal Reserve Board.

Requires each change in the intermediate targets for monetary policy adopted by the Federal Open Market Committee to be disclosed to the public on the date of adoption.

Defines "intermediate targets" as any policy objectives regarding monetary aggregates, credit aggregates, prices, interest rates, or bank reserves.

Repeals provisions which exempt transactions made under the direction of the Federal Open Market Committee and deliberations, decisions, or actions on monetary policy by the Federal Reserve Board and Federal Reserve banks from audits by the Comptroller General.

Requires the estimated expenditures and receipts and proposed appropriations for the Board to be submitted to the President by October 16 each year and included, unchanged, in the annual Federal budget submitted by the President to the Congress.

Provides that no authority of the Board to pay expenses or make disbursements shall be effective except as provided in advance in appropriations Acts.