Hassett, Director of the National Economic Council at the White House, asserts that the Federal Reserve needs to maintain its independence.

According to Jinshi, Hassett emphasizes the critical role of independence in the operations of the Federal Reserve to ensure objective monetary policy and stabilize the economy.

MAIN CONTENT

  • Hassett emphasizes that the independence of the Federal Reserve is necessary.

  • Independence helps ensure objective and effective monetary policy.

  • The perspective stems from the reflection of the Director of the National Economic Council at the White House.

Why does the Director of the National Economic Council at the White House believe that the Fed needs independence?

Hassett's statement, Director of the National Economic Council, reflects an expert viewpoint showing that the independence of the Fed is a key factor in avoiding political influence, ensuring effective monetary policy and long-term economic stability.

Independence is seen as the foundation for the Fed to maintain credibility in the financial market and implement decisions that stabilize the value of the USD through various economic cycles.

An independent Federal Reserve will have the ability to make difficult decisions without being influenced by political pressure, helping to maintain macroeconomic stability.

Brian Hassett, Director of the National Economic Council at the White House, 14/07/2024.

How does the independence of the Fed impact the economy and the money market?

The independence of the Fed helps maintain honest monetary policy, minimize inflation, and stabilize interest rates, thereby boosting investor and business confidence.

Studies by the Federal Reserve and the World Bank show that countries with independent central banks tend to have lower inflation rates and more stable financial markets in the long run.

What risks are there if the Fed loses its independence?

If the Fed is influenced by political pressure or short-term policies, the likelihood of high inflation or financial bubbles will increase, causing significant volatility for the economy.

Historical examples have shown that excessive intervention in the Fed undermines market confidence, such as the financial crisis of the 1970s when the administration pressured for public debt control, leading to uncontrollable inflation.

What is the role of economic experts in protecting the independence of the Fed?

Economic experts and government leaders like Hassett contribute to guiding the public and the policy community about the importance of central bank independence.

The scientific perspectives and real data they provide help raise awareness and reduce inappropriate intervention behaviors, thus protecting the national economic stability.

Summary of key points regarding Hassett's views related to the Fed.

Factors Impacting the Fed Economic Outcomes Independence of the Fed Allows for the formulation of objective monetary policy Maintains price stability, market confidence Political interference Causes policy imbalance High inflation, financial bubbles Support from experts Enhances awareness and protects the Fed's role Economic stability and long-term financial system.

Frequently Asked Questions

What is the Fed and why is independence necessary?

The Fed is the central bank of the United States, independent to ensure that monetary policy is not influenced by politics, helping to stabilize the economy effectively.

Who is Hassett and what is his role in the U.S. economy?

Brian Hassett is the Director of the National Economic Council at the White House, a key economic policy advisor to the President of the United States.

What is objective monetary policy?

Objective monetary policy is built on real economic data, free from political pressure, aimed at maintaining price stability and growth.

How does the Fed losing independence affect the financial market?

Loss of independence could lead to high inflation and loss of confidence, resulting in significant volatility in global financial markets.

How to protect the independence of the Fed?

Independent oversight from experts, scientific organizations, and the community is needed to reduce inappropriate political pressure on the Fed.

Source: https://tintucbitcoin.com/giam-doc-kinh-te-fed-can-doc-lap/

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