The Federal Reserve’s Independence Is an Illusion

The Fed’s supposed independence from the Treasury has always been more rhetoric than reality, and recent friction between Treasury Secretary Bessent and the Fed over currency intervention shows how that rhetoric bends whenever cooperation is convenient. The claimed separation lets both institutions share credit when policy succeeds and deflect blame onto each other when it fails, disguising the Fed’s core political function of financing the government.

The following article was originally published by the Mises Institute. The opinions expressed do not necessarily reflect those of Peter Schiff or SchiffGold.

Treasury Secretary Scott Bessent recently took to X to celebrate what he called one of the “highlights of the Warsh Fed.” His post didn’t have anything to do with what kind of monetary policy a Warsh-chaired Fed will do. It was about the humiliation of mainstream financial journalists—which is fine by me, but let me digress on “Fed independence” between mouthfuls of popcorn.

According to Bessent, Fed reporters such as the Wall Street Journal’s Nick Timiraos have been “reduced to reporting Fed backroom gossip because they’re incapable of performing real economic or monetary policy analysis without being spoon-fed.”