Question

Why do we teach that the Federal Reserve is very independent of the "politics of the moment"? What is it about its structure that "protects" it from political pressure.

How is that working out for the Fed these days?

Answer 1

Answer:(1) Federal Reserve or simply the "Fed" is the central bank of United States.It formed to povide more stable and monetary financial system in the country.

When it is formed,Congress has clear picture that this institution only achieve optimum level results by hold up maximum employement.Decision based on the best available evidence and analysis without any involvement of politics.

(2)Congress structured the federal reserve to be independent from any political authority or pressure.They are still accountable or answerable to the Congress but when it making monetary or any other banking policy they are free from political pressure that we can noticed sometimes in other nations.

(3) At this time of pandemic when 2.3 million people died in U.S. till now,stakes are all together contrasting.President accusing the FED for not getting expected results in economic growth.Also accusing them for not helping in worsening US-China trade relation context.However,Federal Reserve still try to do his job as efficient or without any political pressure.Although,things are become more complex these days.