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Better Off Podcast

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.

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.

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