In particular, during the Great Recession, instrument independence afforded the FOMC the flexibility needed to develop new tools that could address the large and extraordinary challenges it faced in pursuing its dual mandate. The legislative proposals just discussed appear to be motivated by the belief that the Fed’s response during the crisis was somehow ineffective or inappropriate.
In fact, the Fed’s response was a carefully considered exercise of instrument independence that was effective, appropriate, and necessary in light of the congressional mandate to which it is held accountable. Indeed, without those operations, the U.S. economy would have suffered a significantly deeper and longer recession than the very substantial recession we did suffer.