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No, the Fed Is NOT Independent--It Is a Creature of Congress

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  • Yeva Nersisyan
  • L. Randall Wray

Abstract

In response to President Trump's attack on the Federal Reserve, the natural critics of misguided monetary policy find themselves defending the Fed and the notion that the Fed is--and must be--independent. In a recent interview, Senator Elizabeth Warren began by admitting, "I completely disagreed with Chair Powell since he was first nominated by Donald Trump, that's how far back he goes. I have disagreed with him on regulatory policy. I think he's way too easy on the banks. And I have disagreed with him on interest rate policy. I thought he should have lowered interest rates two years ago, and I have said so quite vocally and done my best to persuade him." But she then went on to insist "I have never, ever questioned the independence of the Fed and the Fed's ultimate power to make those decisions based on their best judgment of what's good for the United States of America" (Inskeep 2025).

Suggested Citation

  • Yeva Nersisyan & L. Randall Wray, 2025. "No, the Fed Is NOT Independent--It Is a Creature of Congress," Economics Policy Note Archive 25-7, Levy Economics Institute.
    • Handle: RePEc:lev:levypn:25-7
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