Federal Reserve Chair's Testimony occurs several times a year (normally two times). The chairman of the Fed testifies on the economy before the US Congress and before its committees (such as the Joint Economic Committee).
The Testimony consists of two parts. The first part provides a brief overview of current economic conditions in the country. The chairman testifies on employment, GDP dynamics, consumer price index and inflation based on that index. If any force majeure factors have influenced the economic conditions during the reported period, the chairman mentions these factors in the report.
In the second part, the chairman describes the monetary policy conducted by the Fed on the basis of the current economic situation. He clarifies reasons for raising or lowering short-term interest rates, financial regulation measures and ways to achieve the target inflation level.
After the testimony, the members of the Congress ask Fed questions on measures taken and plans for near-term measures. This part of the event may have a short-time effect on dollar quotes since the prepared statement usually contains predicted rhetoric. The discussion of congressmen and the chairman can bring some unexpected news. Therefore, economists watch this meeting.