From the Port Phillip Insider (AUS) –
The US government, the US Treasury and the Fed played key roles in world finance during, and before, the Second World War.
The Fed’s actions during the Roaring Twenties and Great Depression reverberated around the world.
The young Fed played a role with helping Great Britain fund its First World War debt, and was influential in helping Britain maintain its ‘superpower’ status for a while longer.
But that was all unofficial. Whenever interviewers would ask Fed members about the Fed’s impact on global markets, they would revert to stock standard responses. They would explain that the Fed’s mandates are maximum employment, stable prices, and moderate long-term interest rates.
As for matters such as the value of the US dollar, the Fed will happily tell anyone who will listen that its value is a matter for the US Treasury — not the Federal Reserve.
It’s an extraordinary position, considering the Fed’s actions directly impact the value of the US dollar.
But that’s the party line…and they’re sticking to it.
Or, rather, it was the party line. Based on Fed chair Janet Yellen’s comments overnight, the Fed has gone from ‘unofficial’ central banker to the world, to ‘official’ central banker to the world.