How Trump’s Fed Showdown Could Trigger a Global Financial Earthquake – Are You Ready?
The present concept of it having a high degree of independence to set monetary policy goes back only to 1977 when it was given the dual mandate to promote maximum employment and stable prices.
That was during the burst of inflation even more serious than the recent one, and cleared the way for the Fed chair, Paul Volcker, to push interest rates up to 20 per cent in 1981.
The broader point here is that central banks more generally only received their current degree of independence quite recently.
In the case of the UK, it was the Chancellor who set interest rates until 1997, when Gordon Brown passed the treasury authority to the Bank of England.
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