Federal Reserve Independence Under Threat Amid Interest Rate Politics

Furman University professor Francis Kim is warning that the US Federal Reserve's independence is under threat, echoing a policy from the Korean War era. In his column for the Korea JoongAng Daily, Kim notes that during the war, the government pegged US Treasury yields at certain levels, hindering the Fed's ability to respond to soaring inflation.

Kim argues that this principle of separating monetary and fiscal policy is again being strained today, as politicians pressure the Fed to keep interest rates artificially low. He stresses that when interest rates are subject to politics, markets suffer the consequences.