Why is it important to separate Federal Reserve monetary policy decisions from political influence?
Congress has determined the Federal Reserve can best achieve its mission of supporting maximum employment and stable prices as an independent agency that makes decisions based on the best available evidence and analysis, without taking politics into consideration.
Experience around the world has also shown that countries with independent central banks that are able to make decisions free from political influence have better economic outcomes for their citizens.
In the United States, the Congress set the monetary policy goals for the Federal Reserve—maximum employment, price stability and moderate long-term interest rates, but gave the central bank independence to achieve those goals. The Federal Reserve is accountable to the Congress and the American people and Federal Reserve leaders regularly testify and report to the Congress on how the Federal Reserve is managing monetary policy.