On December 23, 2013, the Federal Reserve System celebrated its centennial. Over the course of that century, the Fed has become one of the most important governmental agencies in the history of the American republic, a transformation one scholar has labeled “the most remarkable bureaucratic metamorphosis in American history.” Its policies influence nearly every aspect of public and private life. Given this importance and influence, “[n]o one can afford to ignore the Fed.”
At the core of that “remarkable bureaucratic metamorphosis” is a much-invoked but as often misunderstood set of institutional arrangements that constitute the Fed’s unique independence. In the standard popular and academic account, law is at the center of that independence: indeed, it is the statute itself, under this view, that defines that independence. Economists and political scientists interested in central bank independence—having written enough on the phenomenon to give it an acronym (CBI)—take as given that law defines central bank independence. And legal academics, in the exceptional event that they have taken note of the Fed, have analyzed its independence within the context of administrative law and agency independence generally. Again, unsurprisingly, statutes are at the center of that analysis, too.