WASHINGTON – Federal Reserve Chairman Ben Bernanke says central bank independence is vital to the credibility needed to keep inflation under control.
Bernanke is speaking via video to a Mexico City conference celebrating 20 years since the constitution was changed to grant autonomy to the central bank and make price stability its primary mandate. He says that change and other steps by policymakers have helped improve Mexico’s economy and reduced its vulnerability to crises.
Bernanke notes that the Fed is celebrating its 100th anniversary this year. He says its independence has been strengthened by changes adopted over time. The benefits have included low inflation and increased credibility, he says.
“The Fed has been able to take aggressive monetary policy actions to help stabilize the economy without dislodging longer-term inflation expectations,” Bernanke says.