How Congress Governs the Federal Reserve

Jill on Money with Jill Schlesinger

Audacy

Education, Investing, Business, Self-improvement

4.6 • 1.9K Ratings

🗓️ 22 March 2018

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week marked the first time the press spotlight was on Jerome Powell, the new Chairman of the Federal Reserve. It was just a few weeks ago that Powell succeeded Janet Yellen, and as expected, the Fed just announced another quarter-point increase in short term interest rates, a sign that the economy continues to grow. It’s probably safe to say that the average person thinks the Federal Reserve is this big stone building in D.C. that does its own thing, if people are thinking about the central bank at all! But the truth of the matter is that not a lot comes out of the Fed without running things by another big stone building, the one that houses the Senate and House of Representatives. To help pull back the curtain a bit on the complicated relationship between the Fed and Congress, we are joined by my childhood friend and Fed expert, Mark Spindel, who along with Sarah Binder, recently published: The Myth of Independence: How Congress Governs the Federal Reserve. The pages trace the Fed’s transformation from its roots as a weak, secretive, and decentralized institution in 1913 to a remarkably transparent central bank a century later. Offering a unique account of Congress’s role in steering this evolution, the book explores the Fed’s past, present, and future and challenge the myth of its independence. Examining the interdependent relationship between Congress and its central bank, The Myth of Independence presents critical insights about the future of monetary and fiscal policies that drive the nation’s economy. Thankfully, the Fed today retains enough power to prevent lawmakers and the president from completely controlling monetary policy. “Better Off” is sponsored by Betterment. We love feedback so please leave us a rating or review in Apple Podcasts. "Better Off" theme music is by Joel Goodman, www.joelgoodman.com. Connect with me at these places for all my content: http://www.jillonmoney.com/ https://twitter.com/jillonmoney https://www.facebook.com/JillonMoney https://www.instagram.com/jillonmoney/ https://www.youtube.com/c/JillSchlesinger https://www.linkedin.com/in/jillonmoney/ http://www.stitcher.com/podcast/jill-on-money https://itunes.apple.com/us/podcast/better-off-jill-schlesinger/id431167790?mt=2

Transcript

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0:00.0	I'm Jill Schlesinger, host of the Better Off Podcast. Today on the show, we're talking Federal Reserve.
0:09.0	The Fed has two primary responsibilities. As the nation's Central Bank central bank indeed it is there to set
0:15.9	monetary policy essentially the level of interest rates to maximize employment and
0:21.6	achieve price stability.
0:23.4	And secondly, they have enormous responsibility back to their inception
0:27.5	to supervise and regulate major money center banks in the United States. So banking supervision and
0:34.0	setting monetary policy. Welcome to the Better Off podcast. We're sponsored by
0:39.1	Betterment, the largest independent online financial advisor.
0:43.4	Well, the first Fed meeting of the year
0:47.0	where we have a change in interest rate policy.
0:50.4	Here we go.
0:51.1	It is the Jerome Powell Federal Reserve. They raised interest rates by a quarter of a percent
0:57.3	exactly what was expected. And this could be a year where there are not just three interest rate hikes.
1:03.8	Maybe they'll be four.
1:04.9	Maybe they'll be five or six.
1:06.1	We don't know.
1:06.7	It depends on the economy.
1:08.5	But what exactly does the Fed have to do with your life?
1:13.0	What do you need to know about the Fed?
1:15.6	Is the Fed truly independent?
1:17.8	To find out, I've invited my oldest friend from growing up, his name is Mark Spindell, he co-wrote a book called The Myth of Independence,
1:26.4	how Congress governs the Federal Reserve, and Mark is going to explain everything you need to know about the Fed.
	...

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