Waller: Monetary Policy Will Be Independent of Political Factors, Fed Has Lost Its Way

On April 21, Fed Chair nominee Waller stated during his confirmation hearing in the Senate that he would make monetary policy decisions independently and would not be influenced by any suggestions or pressures from Trump. He emphasized that successfully maintaining low inflation is like a ‘protective armor’ that shields the Fed from criticism. Waller noted that maintaining this independence ‘largely depends on the Fed’ to successfully achieve its goals without exceeding the authority granted by Congress. He stated, ‘I believe that even if government officials—presidents, senators, or representatives—express their views on interest rates, the execution independence of monetary policy will not be particularly threatened. The mission granted to the Fed by Congress is to ensure price stability, without any excuses, ambiguities, disputes, or pain. Inflation is a choice, and the Fed must be held accountable for it. Low inflation is the Fed’s shield.’ Waller remarked that the Fed has lost its way, and independence is crucial and must be earned. After selling assets, he is willing to hold cash or Treasury bills.