Federal Reserve Chair Jerome Powell emphasized the importance of central bank policy remaining above the fray of partisan politics during his semiannual testimony before the Senate Banking Committee on Tuesday.
“All advanced economies have adopted a policy of central bank operational independence, and that just means that we make our own decisions,” Powell said. “We’re instructed to make them without taking in extraneous factors, one of which would be politics, and the record is pretty clear that that’s a good, intentional arrangement that serves the public well.”
The Fed is responsible for monetary policy, which includes setting interest rates, while Congress and the White House set the U.S.’s fiscal policies, including taxation and spending.