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.
Financial stability The research on monetary policy independence at the end of the 20th century was conducted on the assumption that the central bank was focused on its direct macroeconomic mandates such as inflation and employment. After the global financial crisis, we cannot ignore the fact that central banks are typically tasked with multiple responsibilities, often among them, preserving or contributing to financial stability.