Milton Friedman on the Federal Reserve
71 passages for “the Federal Reserve”, 58 checked against the source. Page 2 of 8.
Full topic page: Monetary policy and the Federal Reserve
As a matter of principle, I am opposed to independence for the Federal Reserve System. Monetary policy should be administered by a governmental agency in the regular administrative hierarchy ultimately responsible to Congress.
Statement to the House Subcommittee on Domestic FinanceTestimony, 1968, Compendium on Monetary Policy Guidelines and Federal Reserve Structure, Subcommittee on Domestic Finance, House Committee on Banking and Currency, 90th Congress, 2nd Session (December 1968), p. 204Another occasion in U.S. history which strikingly illustrates this point is our experience from 1929 to 1933. Without doubt, the most serious mistake in the history of the Reserve System was its mismanagement of monetary matters during those years.
Should There Be an Independent Monetary Authority?Journal article, 1962, In Search of a Monetary Constitution, ed. Leland B. Yeager (Harvard University Press, 1962), pp. 219–243; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 205–214, p. 211 of the 1968 House reprintThe Fed should operate entirely by deciding (and announcing) in advance the changes in the monetary base (currency plus deposits at Federal Reserve Banks) required to achieve its monetary targets. If it wishes to do so, the Fed can control the base almost precisely from week to week through purchases and sales of government securities.
Improving Monetary PolicyColumn, 1980, Newsweek, July 28, 1980; reprinted in the Congressional Record, Extensions of Remarks, July 28, 1980, p. 20026, introduced by Representative Robert Dornan of California, who gives the column as appearing in the Newsweek issue “dated July 28, 1980”, Congressional Record, July 28, 1980, p. 20026If the relation that has prevailed between money and prices for the past dozen years continues, and if the Federal Reserve continues to permit the quantity of money to grow by 10 per cent a year, inflation will proceed at a rate of about 6 per cent. Judged not by pronouncements, not by intentions, but by performance, that is the rate that monetary policy for the past four years has been directed at producing.
Perspective on InflationColumn, 1974, Newsweek (June 1974); reprinted in the Congressional Record, Extensions of Remarks, June 18, 1974, pp. 19786 to 19787, introduced by Representative Jack Kemp of New York, who calls it “his column this week in Newsweek.” The reprint gives no issue date, and the chart that ran with the column is not reproduced, Congressional Record, June 18, 1974, pp. 19786 to 19787The future well-being of this country depends critically on whether, this time, intentions are translated promptly into performance.
Perspective on InflationColumn, 1974, Newsweek (June 1974); reprinted in the Congressional Record, Extensions of Remarks, June 18, 1974, pp. 19786 to 19787, introduced by Representative Jack Kemp of New York, who calls it “his column this week in Newsweek.” The reprint gives no issue date, and the chart that ran with the column is not reproduced, Congressional Record, June 18, 1974, pp. 19786 to 19787What now explains the divergence between the Fed’s promises and its performance? Why does the Fed remain an engine of inflation? I confess that I am baffled.
The Inflationary FedColumn, 1973, Newsweek, August 27, 1973; reprinted in the Congressional Record, Extensions of Remarks, November 7, 1973, p. 36327, introduced by Representative Robert Huber of Michigan as “Mr. Milton Friedman’s article that appeared in Newsweek of August 27, 1973”, Congressional Record, November 7, 1973, p. 36327Instead of simply requiring the Federal Reserve to report its “projections” or “targets” for monetary growth, let the Congress require the Fed to achieve specified rates of monetary growth (or specified levels of the quantity of money) within specified ranges of tolerance. That would combine responsibility and power. It would also enable the ordinary citizen to know whom to hold accountable for inflation.
Why Inflation PersistsColumn, 1977, Newsweek (October 3, 1977); reprinted in full in the Congressional Record, Extensions of Remarks, September 29, 1977, p. 31684, introduced by Representative Parren J. Mitchell of Maryland, who gives it as appearing “in the October 3, 1977, issue of Newsweek”, Congressional Record, September 29, 1977, p. 31684It matters little whether the Federal Reserve is unable or unwilling to exercise its independence in deeds as well as words. In either case, let us be done with the fiction that “independence” is somehow or other a bastion against inflation. Let us put the responsibility for the rate of monetary growth—and therewith for the subsequent rate of inflation—squarely and openly on the Administration and Congress.
Why Inflation PersistsColumn, 1977, Newsweek (October 3, 1977); reprinted in full in the Congressional Record, Extensions of Remarks, September 29, 1977, p. 31684, introduced by Representative Parren J. Mitchell of Maryland, who gives it as appearing “in the October 3, 1977, issue of Newsweek”, Congressional Record, September 29, 1977, p. 31684To paraphrase Clemenceau, money is much too serious a matter to be left to the Central Bankers.
Capitalism and FreedomBook, 1962, Ch. 3 The Control of Money, p. 50-51Not yet checkedCite this passageThe rates of monetary growth specified by chairman Burns are too high. Yet, even so, actual monetary growth has been substantially higher.
The Inflationary FedColumn, 1973, Newsweek, August 27, 1973; reprinted in the Congressional Record, Extensions of Remarks, November 7, 1973, p. 36327, introduced by Representative Robert Huber of Michigan as “Mr. Milton Friedman’s article that appeared in Newsweek of August 27, 1973”, Congressional Record, November 7, 1973, p. 36327