The Federal Reserve has done as much as any official body to spare America a repetition of the grim depression of the 1930s, but that is not always enough to make it popular. Suspicions have resurfaced that powerful financial interests are in league with the Fed to gain advantage for themselves, prompting calls from the left and right to “audit the Fed”.
Janet Yellen, the Fed chair, was this week moved to warn against measures that might subject policymakers to “short-term political pressure, in the name of transparency”. She is right. In the past six years, monetary policy has been the only consistently functional economic policy tool.
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The above excerpt was originally published in Financial Times.
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