How the Fed is independent from politics?

The decision of Wednesday shows that the central bank alone far-reaching fiscal decisions. Since the Fed system is funded, it is not subject to budgetary control by the Congress. Even the President has no formal influence on decision making by the Fed.

He determined, however, the members of its Board of Governors, which then approved by Congress must be confirmed. Shortly after his election Obama put a sign by the lawyers Daniel Tarullo appointed to the Board. The former Clinton staff has been a long time for a stronger regulation of financial markets. Beginning of 2010 Obama decides whether to Fed Chairman Bernanke is in office leaves. In the first half years of his term he will probably five of the seven governors have appointed.

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