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Isn't the Federal Reserve supposed to be an independent central bank? So, independent of the Legislative and Executive branches? How is it independent if the President & Senate choose who leads the bank?

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    Isn't the Federal Reserve supposed to be an independent central bank? supposed by whom ? An independant central bank is one of the motto of the Chicago Ecomonics School (and of most neo-classical economics), but the only area where this is really endorced is the Euro-zone. And we in Europe have some reasons to complain about it...
    – Evargalo
    Commented Apr 3, 2018 at 7:51
  • @Evargalo "Independence" does not mean that the board isn't appointed by the government, but that once appointed they act independtly. For the Bundesbank The President, the Vice-President and one other member are nominated by the Federal Government; the other three members are nominated by the Bundesrat (the upper house of Parliament representing the Federal States) in agreement with the Federal Government.
    – SJuan76
    Commented Apr 3, 2018 at 8:28
  • @SJuan76 : Correct. You bring some matter to answer the third question of the OP. I was addressing the first one.
    – Evargalo
    Commented Apr 3, 2018 at 8:31
  • Same way Judges are an independent branch of government, despite being appointed by the Executive originally.
    – user4012
    Commented Apr 3, 2018 at 13:48
  • @Evargalo I get the impression that the European Central Bank is no more or less independent than the US Federal Reserve, inasmuch as the Executive Board of the ECB are appointed by the Eurozone Heads ofGovernment?
    – owjburnham
    Commented May 30, 2018 at 18:07

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The appointments clause of the US constitution gives the president the power to appoint "Officers of the United States". Unlike the Bank of England, which was a private organisation that was later nationalised, the Federal Reserve was created by an Act of Congress, and the Board of Governors is appointed by the President, under the constitutional power mentioned.

In this sense, it is not independent of government, however, its decisions are not subject to Presidential review or approval, and appointments to the board are for 14-year terms and so span multiple presidencies.

Unlike many central banks, the board members openly identify with political parties, and appointments to the board are fought over party lines, as all appointments require the "consent" of the Senate.

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