Episode
The Myth of an Independent Fed
- Podcast
- The Dividend Cafe
- Published
- May 29, 2026
- Duration seconds
- 1301
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Summary
Today's Post - https://bahnsen.co/4wQ3FUF From the Reagan Library during a week of speeches, David Bahnsen discusses the politicized debate over Federal Reserve independence following Kevin Warsh’s confirmation as Fed chair and the recent Trump–Powell conflict. He argues the Fed is not constitutionally independent: Congress created it in 1913, set its mandate (including via Humphrey-Hawkins), requires semiannual reporting, and presidents appoint governors who serve staggered terms and cannot be fired without cause. Bahnsen notes monetary policy is inherently political because it affects prices, employment, and government borrowing, and he cites historical Fed–Treasury coordination in the 1990s crises, 2008 (TARP/AIG), and 2020 (CARES Act). He calls for Congress to clarify the Fed’s legal structure and increase oversight, supports practical independence from political pressure, and criticizes both election-driven rate cuts and Phillips-curve-driven tightening. 00:00 Intro to Today's Topic 01:41 Warsh Pick and Market Reaction 03:08 Why Fed Independence Matters 05:37 Trump Quote on Independence 06:11 Fed Origins and Legal Structure 08:46 Why Monetary Policy Is Political 10:22 Crisis Coordination Examples 13:35 Do We Want Independence 15:25 Congress Oversight and Reform 17:11 Warsh Expectations and Fed Fixes 19:49 Conclusion Links mentioned in this episode: DividendCafe.com TheBahnsenGroup.com