Federal Reserve Governor Adriana Kugler says maintaining the American central bank’s independent existence is crucial, warning that interference from the government would lead to adverse consequences.
“It has been widely recognized—and is a finding of economic research—that central bank independence is fundamental to achieving good policy and good economic outcomes,” Kugler said in a Nov. 14 speech in Uruguay. “It is not sufficient by itself to achieve those goals, but, over time, it is almost always necessary.”
She said that central bank policies “significantly influence prices, interest rates, employment, and income in the economy.” Policies that promote employment growth and economic activity put upward pressure on inflation. In contrast, policies to lower inflation tend to slow down economic activity and employment growth….