Free for 90 days: Sign up now and get 90 days managed free after your first deposit. See offer details

<title>Dismiss</title>

How Congress Governs the Federal Reserve

Author Mark Spindel, expert on the Federal Reserve offers an account of Congress’s role in steering the evolution of the Federal Reserve and challenges the myth of its independence.

Articles by Jill Schlesinger

By Jill Schlesinger, CFP®
  |  Published: March 22, 2018

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.

Listen to the full interview with Mark Spindel, expert on the Federal Reserve

The opinions stated on the Better Off podcast are those of the host, Jill Schlesinger, and her guests, and not those of Betterment or its employees. Any third party links provided are offered as a matter of convenience and are not intended to imply that Betterment endorses, or is affiliated with the owners of or any information contained on those sites, unless expressly stated otherwise. Listen to a preview and subscribe to “Better Off” here.

Recommended Content

View All Resources

Jon Stein on “How I Built This:” Reflecting on Our Story

Jon Stein joins NPR’s Guy Raz for an episode of “How I Built This” to look back at how Betterment started, what mistakes were made, and how they turned into learnings for the robo-advisor we are today.

What is Tax Coordination? How Asset Location Works at Betterment

What is Betterment's approach to asset location? It's called Tax Coordination, and it's a built-in tax optimization strategy for retirement goals at Betterment.

FDIC Insurance: What It Is And How It Works

Deposit insurance was created in 1933 by Congress to restore faith in the U.S. banking system. Learn about how deposit insurance works and what it can mean for your cash.

Explore your first goal

Cash Reserve

Our high-yield account built to help you earn more on every dollar you save.

Safety Net

This is a great place to start—an emergency fund for life's unplanned hiccups. A safety net is a conservative portfolio.

Retirement

Whether it's a long way off or just around the corner, we'll help you save for the retirement you deserve.

General Investing

If you want to invest and build wealth over time, then this is the goal for you. This is an excellent goal type for unknown future needs or money you plan to pass to future generations.

See details and disclosure for Betterment's articles and FAQs.