The Federal Reserve’s Fatal Conceit
It’s time to look at what is—or should be—the role of our central bank in America’s free market economy.
June 26, 2025
Fed Chair Jerome Powell, June 18, 2025.
News Article
It’s time to look at what is—or should be—the role of our central bank in America’s free market economy.
What is the appropriate role of the Federal Reserve in America’s free-market economy? I ask because the Fed appears to be standing in judgment of the economic growth agenda being pursued by President Trump—acting purposely to stymy its goals by imposing restrictive interest rates. Is it the central bank’s responsibility to counter the policy initiatives of the nation’s chief executive when it disagrees with them?
Fed officials are quick to claim the moral high ground in defending their actions by invoking the central bank’s exalted mandate to promote “stable prices” and “maximum employment.” The Fed’s definition of stable prices, though, has long been reconfigured to mean that our nation’s monetary integrity will be steadily eroded through central bank decisions that continually reduce the purchasing power of every American dollar. Plus, the Fed’s dedication to maximum employment is belied by its efforts to restrict access to credit for America’s small businesses, where most jobs are created.
