Fed Governor Kugler defends central bank independence

Federal Reserve Governor Kugler firmly defended the central bank's independence on Thursday, saying that keeping monetary policy decisions free from political influence can improve inflation outcomes. Kugler said central bank independence is "fundamental" to achieving low inflation, especially in advanced economies. Kugler said that as part of credibility, it is key for central banks to be transparent and accountable. She cited the Federal Reserve as an example, saying that officials such as Fed Chairman Powell have tried to clearly explain the Fed's goals and actions. "Monetary policy works in part by trying to influence the public's views on future economic conditions, so it is critical to clearly communicate those intentions," she said. This helps to build credibility by giving legitimacy to decisions and can make policy decisions more effective. "If the central bank takes actions that convince the public that the central bank is actively pursuing its stated goals, then the central bank will be more credible," Kugler said. (Jinshi)