Political meddling in the affairs of central banks is unfortunate, though surely not unknown. It weakens the credibility of the monetary authorities, raises inflation expectations, and builds an inflation premium into long-term interest rates. This is why countries around the world, from Mexico to France, are making their central banks independent.

This lesson has not yet been fully learned by Congress, whose key members have recently criticized the Federal Reserve for its conduct of monetary policy (see The New York Times, June 13, 1993). The debate is not inconsequential, since Fed Chairman Alan Greenspan is to appear before Congress to present the Fed's midyear Humphrey-Hawkins testimony in late July.

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