Question

Please discuss the Independence of the Fed. Why the Fed's independence is important? Do you believe the Fed is making policy independently? Why?

Answer 1

Federal Reserve is central bank of United States of America and it is formed under the special act & it is only accountable to the Congress because the quarterly report of the Federal Reserve is admitted to the United States congress.

Federal Reserve is said to be independent but in fact it is influenced a lot by the Federal government because Federal government will be forcing the Federal Reserve to undertake various decisions like we can see in the case of Donald Trump continuously forced Jerome Powell to reduce the rate to stimulate the economy

it is highly important that Federal Reserve should be independent because it will help federal reserve in order to protect various kinds of economic decisions and make policies accordingly in advance so it would not be making policies in order to please the people but in fact it would be trying to manage the economy in a best possible manner and prepare the best monetary policy which will suit the needs of the economy.

I do not think that Federal Reserve is making the independent policy because it is just trying to please the government and government is trying to enhance the stock market so they are cutting the interest rates continuously and taking a higher amount of that so we can see that it will be having impact on the dollar in the coming times when the value of Dollar will depreciate due to a weaker Federal Reserve