Daily Newsletter 7/18/25

Our aim is to remain objective, grounded in logic and informed analysis. Yet, it’s clear that politics and economics are inextricably linked—arguably, they are components of the same equation. Regardless of political views, there must be shared principles to ensure the system’s effectiveness. Common ground is essential for societal stability. Debates about the Federal Reserve—its necessity, its independence—require us to agree on foundational standards, with Fed independence historically serving as one such cornerstone.

While the Fed has at times operated beyond strict monetary policy, and its forecasting methods may need modernization, independence is a separate and vital issue. The Fed controls the money supply, not fiscal spending—responsibility for government expenditures lies elsewhere. Calls to update and improve the Fed are valid, but history shows that compromising its independence often results in significant costs to the public. Safeguarding that independence should remain a priority.

We fully acknowledge the critics’ concerns that the Federal Reserve is often mistaken or slow to respond, relying on outdated forecasting methods in a rapidly evolving macroeconomic landscape. The Fed undoubtedly needs to adapt and modernize. However, as we work toward improving its effectiveness, it is essential that we preserve its independence as a core principle.

A discussion about the necessity of the Federal Reserve is both valid and valuable. However, making its functioning dependent on any particular ideology, viewpoint, or group carries the risk of unintended consequences.