Federal Reserve Governor Milan: The Federal Reserve does not have absolute, 100% pure independence

Comparing news, Federal Reserve Governor Milan said that the Fed's balance sheet needs to be reduced, but this should not prevent policymakers from choosing large-scale asset purchases during the economic crisis. Even if balance sheets are reduced, central banks still need to preserve the ability to use quantitative easing in times of crisis. He pointed out that real large fluctuations in the US dollar are needed to have a significant impact on inflation.

While discussing the independence of the Federal Reserve, Milan said that central bank independence would bring better policies, but it is a means to an end, not the end itself. In times of crisis, there will be extensive cooperation between the Federal Reserve and the Treasury. There is no absolute, 100% pure independence; nonetheless, it is critical that we make decisions based on economic needs—tighten when the economy needs to shrink, and ease when it needs to be relaxed, not for any other reason.