MNI POLICY: Waller Stresses Fed's Independence in Debut Speech

Federal Reserve Governor Christopher Waller on Monday stressed the central bank's independence during his first speech since being appointed by former President Donald Trump, saying costs associated with U.S. deficits won't influence monetary policy decisions.

"Deficit financing and debt servicing issues play no role in our policy decisions and never will," said Waller. He made no direct reference to the record outlays planned by Joe Biden's administration.

The Fed will continue to act solely to fulfill congressionally mandated goals of maximum employment and price stability, Waller said, and not hold interest rates low to enable fiscal authorities.

"My goal today is to definitively put that narrative to rest. It is simply wrong," he said.

Cooperation in times of crisis between monetary authorities and the finance ministry, like during the initial phases of the COVID crisis, was crucial for staving off an economic disaster, he said. "But the independence of the Federal Reserve is in the nation's best interest and should be valued and protected by all."

The Fed and the Treasury will continue to cooperate regularly in some matters, he said. The Fed maintains the Treasury's operating account, where it accepts deposits, pays checks, and makes electronic payments on behalf of the Treasury. The two bodies also work together to operate 13(3) emergency lending facilities.