Fed Governor Mester: The Fed Does Not Have Absolute, 100% Pure Independence

BlockBeats News, February 10th, Federal Reserve Governor Milan stated that the Fed's balance sheet needs to shrink, but this should not deter policymakers from choosing to engage in large-scale asset purchases during an economic crisis. "Even as the balance sheet shrinks, the central bank still needs to retain the ability to use quantitative easing during a crisis." He pointed out that the dollar needs to experience a "truly significant fluctuation" to have a significant impact on inflation.

Discussing the independence of the Federal Reserve, Milan stated that central bank independence will lead to better policies, but it is a means to an end, not an end in itself. "During a crisis, there will be extensive cooperation between the Federal Reserve and the Treasury Department. There is no absolute, 100% pure independence; nevertheless, making decisions based on economic needs is crucial—we tighten when the economy needs tightening, we loosen when it needs loosening, and not for other reasons."