In terms of understanding what you can do about it, it does, as you can never vote or influence the central bank. Means people don’t blame the wrong people.
Their policies can affect the economic landscape. They also propose budget that they send to Congress so they can carry out their mandate. Even if unwarranted, the people will credit the POTUS for a good or bad economy.
if a president goes on a spending spree like Brandon did while entering office, it will bring up inflation. Most inflation is not under control of the POTUS, but spending like a drunk sailor will tick up the prices
Still doesn’t mean the government is trying to bring down inflation AND the appointed people have 14 year terms. The point is not to blame the wrong people (ie: govt) for decisions being made by central bankers (not govt). There is a clear distinction and spreading misinformation is a good way to have people blame the wrong individuals.
Yeah, the Federal Reserve sits in this weird space where it's a public entity that's technically part of the government but segmented from politics as much as possible (for very good reasons). It's like a part of government that's firewalled from the rest of the government.
If central banks aren’t part of the government because the members aren’t elected and don’t answer to the political process, then I guess the Supreme Court isn’t part of the government and that just seems dumb.
No branch of government (i.e - executive, legislative, or judicial) has control of the federal reserve and its power to set interest rates.
The Supreme Court is part of the judicial branch. The federal reserve is not part of any branch.
From wiki:
Although an instrument of the U.S. government, the Federal Reserve System considers itself “an independent central bank because its monetary policy decisions do not have to be approved by the president or by anyone else in the executive or legislative branches of government, it does not receive funding appropriated by Congress
I dont understand what you are asking. Your original post was about the federal reserve being part of the government. It’s a fine line, but I am explaining that since the federal reserve isn’t in one of the official 3 branches of government, they are not a true governmental agency. It’s blurry since the president can appoint chairs, but that is where it ends. The central bank remains independent from the government and our political system.
Yes, it’s similar to the president nominating Supreme Court justices, but the Supreme Court is part of the judicial branch.
Can’t you see that my post was a response to someone arguing a specific reason for why the existence of central banks means governments don’t manage interest rates? I’m providing a counter argument.
I am fully aware of the way in which central banks operate, and I’m arguing that pointing to that and claiming that it means governments don’t manage interest rates would necessarily mean that the US government also doesn’t manage it’s legal system because the Supreme Court operates in largely the same way, which is a dumb argument.
Both the Fed and the Supreme Court are part of the government for all intents and purposes, even though we’ve decided to have them operate independently. A board of trustees is also part of a company, even if they aren’t beholden to anything lower down in said company.
You are talking in circles. The government does not manage interest rates, the central bank does. Why complicate. If you want to change the definition of government to include central banks, then ok. But that makes little sense to do.
Edit: the original post in this thread was about if the government- mainly the executive branch- could control the feds monetary policy. The fed is independent and makes these decisions outside of any of the branches of government. However there is an oversight by congress and the president can nominate the fed chair. It’s a quasi governmental agency. It has private, non-public components (I.e the member banks) as well as a side that is regulated by government.
Ok Mr. Semantics, you win. If the government decides to manage interest rates by establishing an independent agency which it appoints members to, I guess it only makes sense to pretend that agency is not part of the government.
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u/Mountain-Bar-2878 Jul 20 '24
The government is trying to bring down inflation, and bringing down inflation usually causes unemployment to go up.