Ben Bernanke and Janet Yellen: The Fed Must Be Independent — an opinion from nytimes.com by Ben Bernanke and Janet Yellen; this is a gifted article
As former chairs of the Federal Reserve, we know from our experiences and our reading of history that the ability of the central bank to act independently is essential for its effective stewardship of the economy. Recent attempts to compromise that independence, including the president’s demands for a radical reduction in interest rates and his threats to fire its chair, Jerome Powell, if the Fed does not comply, risk lasting and serious economic harm. They undermine not only Mr. Powell but also all future chairs and, indeed, the credibility of the central bank itself.
Independence for the Federal Reserve to set interest rates does not imply a lack of democratic accountability. Congress has set in law the goals that the Fed must aim to achieve — maximum employment and stable prices — and Fed leaders report regularly to congressional committees on their progress toward those goals. Rather, independence means that monetary policymakers are permitted to use fact-based analysis and their best professional judgment in determining how best to reach their mandated goals, without regard to short-term political pressures.
Of course, Fed policymakers, being human, make mistakes. But an overwhelming amount of evidence, drawn from the experiences of both the United States and other countries, has shown that keeping politics out of monetary policy decisions leads to better economic outcomes.