Is the US Federal Reserve truly independent? The ‘Fed put’ says otherwise

MOST believe that US President Trump’s attacks on the US Federal Reserve over the past few months represent a serious threat to the central bank’s independence, and that this is objectionable because an independent Fed is essential to instil confidence whenever the Fed adjusts its policies.

That’s the theory – the real-world reality, however, is that the Fed is actually far from truly independent, often basing its actions on the health of the stock market.

At the heart of the myth of Fed independence lies its interventions in times of market turmoil which have given rise to the “Fed put’’ in the market’s collective consciousness.