Former Federal Reserve Chairman Paul Volcker, Alan Greenspan, Ben Bernanke, and Janet Yellen jointly wrote on the Wall Street Journal on August 5, calling on the Fed to maintain Independence should be based on the best interests of the country to make decisions, not based on the interests of a handful of politicians.
The article is titled “America Needs an Independent Fed.” The former chairman of the four Fed states said that four people have served as the chairman of the Fed for nearly 40 years, during which they have been appointed by the Republican and Democratic six presidents. They firmly believe that the Fed and the Fed chairman must be allowed to act independently to maximize economic benefits and not be affected by short-term political pressure, especially if Fed officials are not threatened with dismissal or demotion for political reasons.
The article mentioned that the four former presidents recalled the past decisions. Although not all decisions are perfect, they are not affected by short-term political interests, but are based on the analysis of the long-term economic interests of American citizens. The result of a non-political assessment is therefore better.
The article stated that both domestic and international history have proved that when the central bank is not affected by short-term political pressure and relies only on sound economic principles and data, the economy can reach its strongest state and achieve optimal operational results. Because the non-partisan, independent monetary policy is very important, Congress has wisely set the Fed as an independent institution to prevent political manipulation.
The article pointed out that although political leaders demanded that the central bank implement monetary policy to boost the economy before and after the election, the study shows that if the monetary policy is based on political considerations, it may weaken the public’s confidence in the central bank and lead to financial markets. Unstable and worse economic consequences.
The article finally called for the Fed to make decisions in the best interests of the country, not on the interests of a handful of politicians.