Reported 5 months ago
The Biden administration expressed strong support for an independent Federal Reserve in response to reports that former President Trump is considering ways to exert more control over U.S. monetary policy. In a blog post by the White House Council for Economic Advisors, the historical evidence supporting central bank independence was emphasized, highlighting the importance of avoiding political influence on monetary policy to effectively control inflation. This stance aligns with the views of economists, previous statements by CEA chair Jared Bernstein, and ongoing efforts by Fed Chair Jerome Powell to combat inflation. Trump has criticized current President Biden over inflation and speculated that Powell may lower interest rates to benefit Biden's reelection, despite the Fed's target of 2% inflation. The Fed's independence is credited with successfully managing inflation while minimizing harm to the labor market.
Source: YAHOO