APPOINTMENTS, PRESIDENTIAL POWER, AND THE FEDERAL-RESERVE

The Federal Reserve is nominally independent of elected officials, but it is widely seen as being subject to presidential influence. A numbe r of scholars who have taken this view have also identified the appoin tment power as the most important mechanism for the exercise of this i nfluence. An examination of the institutional nature of the relationsh ip between the president and the Fed casts doubt on this assertion. We argue that the president's use of this institutional prerogative, as a means of influencing Fed policy activity, is a more limited tool tha n previously realized.