Politics and the Federal Reserve: A Delicate Balance

This chapter examines how political influences shape the Federal Reserve's monetary policy, particularly looking at Secretary Yellen's recent engagements and their impact on the institution's independence. It discusses historical pressures, strategies for anticipating policy shifts, and the implications of international currency valuations, especially concerning major economies like Japan and China. The conversation also explores the potential for a new trade agreement reminiscent of the Plaza Accord to address currency imbalances in a changing geopolitical landscape.