Bank of America CEO says the market "will punish people if we don't have an independent Fed"

[mwooldri]

6. Bank of America CEO is right on this.

I know what life is like with a non independent central bank. The Bank of England used to be in bed with the government of the day. Interest rate policies were set at No. 11 Downing Street. In the late 1980s, early 1990s, the UK government policy of the time was to keep the UK Pound Sterling within the European Exchange Rate Mechanism - with the aim of eventually joining the Euro.

A certain billionaire financier called George Soros decided to get big against the Bank of England .... and the UK government. He won in the end. UK ended up having crazy high interest rates for a bit, the Pound withdrew from the Exchange Rate Mechanism, didn't join the Euro... Yep the British folks were punished. The Labour government under Blair got the process underway to give the Bank of England its independence. And those crazy high interest rates for a time impacted me directly as it made my dad's adjustable rate mortgage way too expensive and we ended up losing our home as a result.

The US Federal Reserve needs to remain independent. Having a board that sets rates based on the mood of the person in charge at 1600 Pennsylvania Avenue.... It would IMO be a disaster.