1. Monetary Policy & Politics
April 13, 1999

2. Role of the Federal Reserve Board in Macro Policy
Conducting the nation's monetary policy by influencing the money and credit conditions in the economy in pursuit of full employment and stable prices
Supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers

3. Role of the Federal Reserve Board in Macro Policy
Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
Providing certain financial services to the U.S. government, to the public, to financial institutions, and to foreign official institutions, including playing a major role in operating the nation's payments system.

4. The Federal Reserve Banks

5. Politics and the Federal Reserve Board
The Fed as a bank is more concerned about inflation than unemployment
The timing of interest rate changes can affect political outcomes
The Fed can affect presidential policies by impacting the money supply.
The Fed can be held as a scapegoat and make decisions that the politicians will not make.

6. Economics and Politics
Bush and Re-election bid
It’s the economy stupid!
President’s are held accountable for the macro economy
Perception about the economy may be more important than reality