ECB’s Rehn: Hope US Federal Reserve Will Retain Its Independence After Elections

30 August 2024

By David Barwick and Isabel Teles – TALLINN (Econostream) – European Central Bank Governing Council member Olli Rehn on Friday said that he hoped the United States Federal Reserve would remain fully independent following the upcoming US elections.

During a panel discussion at Eesti Pank, Rehn, who heads the Bank of Finland, said that the credibility of monetary policy had been a key element of getting inflation back to target in the aftermath of major supply shocks.

In previous periods, advanced economies’ central banks had been forced to confront stagflationary episodes, he observed.

‘Now we have not faced this kind of stagflation recently, and a key factor has been that the central banks are credible in their job in bringing down inflation to the target, stabilising inflation to the target’, he said.’ And here a critical difference to the 1970s is central bank independence.’

‘And it’s important to ensure that this will continue, and I hope that there will not be any setbacks to central banks independence in the United States of America, for reasons which I don't have to mention here, because that will start spreading to Europe as well’, he continued. ‘So that's why the US presidential election is critical, also for Europe and Europe's economic development over the longer term.’