The Tradition of Federal Reserve Independence

Jonathan Rose and David Wheelock

No 2026-013, Working Papers from Federal Reserve Bank of St. Louis

Abstract: The tradition of Federal Reserve independence is encoded in statute in important ways but is also rooted in norms and practices. To articulate this tradition, we discuss how those norms and practices emerged historically from compromises over the concentration of power, actions taken by political leaders and Fed officials to define the boundaries of the Fed’s independence, and in reaction to evolving monetary theories and practices. We argue that understanding these historic roots provides essential context for evaluating challenges to the Fed's independence today and in the future.

Keywords: Federal Reserve; central bank independence; monetary policy (search for similar items in EconPapers)
JEL-codes: E58 N12 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2026-07-06
New Economics Papers: this item is included in nep-mac and nep-mon
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DOI: 10.20955/wp.2026.013

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