Federal Reserve Advantages

Decent Essays
The Federal Reserve is a preserve of economist while the government is headed by politicians. It follows therefore that the Federal Reserve must offer guidelines on how to formulate the fiscal policies which is done by the president and congress in order to reflect in the monetary policies. For example, the government cannot institute tax cuts when the dollar is too strong because it will increase on the strength of the dollar further leading to international trade imbalances and scaring away international investors who fear that changing their currencies to dollar will diminish their investing power. The strength of the economy therefore is not derived by a strong currency or low interest rates but a balance in all monetary and fiscal policies
Get Access