An independent central bank is “fundamental” to good economic outcomes, a senior Federal Reserve official said Thursday, amid concerns that president-elect Donald Trump may seek to influence Fed policy.
The Fed has a dual mandate from Congress to act independently to tackle both inflation and unemployment — primarily by raising and lowering interest rates.
Anything that undermines the Fed’s independence could spook traders in the financial markets, who might come to question if it could effectively tackle inflation over the longer term.
Fed governor Adriana Kugler’s speech in the Uruguayan capital Montevideo comes just over a week after the election of Trump — who has previously questioned the Fed’s independence and suggested he would like “at least” a say over setting interest rates.
Kugler did not name the Republican president-elect during her remarks, in …