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Are independent central banks going out of style?

The fear among monetary policymakers that governments will reassert control over interest rates is exaggerated

Federal Reserve Board Chair Jerome Powell (L) testifies before Congress, as a photo of US President Donald Trump is shown on a screen
Federal Reserve Board Chair Jerome Powell (L) testifies before Congress, as a photo of US President Donald Trump is shown on a screen Photo: Getty Images

President Donald Trump’s decision to nominate economist Judy Shelton for one of the vacant positions on the Federal Reserve Board has put the future of central bank independence back on the agenda.

Shelton has cast doubt on the desirability of, and legal basis for, Fed independence, saying last year, “I don’t see any reference to independence in the legislation that has defined the role of the Federal Reserve.”

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