Fed’s Regional Structure Aids Policy Independence

The Federal Reserve’s unique structure helps preserve monetary policy independence, according to a new academic study that comes at a time of heightened tensions between the White House and the central bank.

Cleveland Fed economist Edward Prescott and Rutgers University economics professor Michael Bordo argue the Fed’s deliberately decentralized design -- with 12 regional banks around the country augmenting the Board of Governors in Washington -- has been a source of strength.