Calls for Central Bank Independence Are Myopic

Donald Trump’s attacks on the Federal Reserve have been met with ardent defenses of central bank independence. Yet the Fed has always been vulnerable to political pressure, something that the insistence on returning to a pre-Trump status quo elides.

In response to the Trump administration’s public pressure campaign on the Federal Reserve, including the firing of Federal Reserve Board of Governors member Lisa Cook, many journalists, economists, and government officials have articulated strong defenses of central bank independence. Most emphasize how political pressure on the Federal Reserve to cut interest rates, possibly in an attempt to finance government deficits cheaply, can have severe long-term economic consequences such as high inflation and weak growth.

These articles ignore a key