Fed’s Schmid says central bank independence crucial during shutdowns

Investing.com -- Federal Reserve independence proved valuable during the recent U.S. government shutdown, according to Kansas City Fed President Jeffrey Schmid, who highlighted the central bank’s ability to maintain financial operations despite the federal funding lapse.

"There’s probably a real good lesson in the whole issue of independence to have an entity like a central bank that will continue to move that flow of money," Schmid said at an energy conference jointly organized by the Kansas City and Dallas Federal Reserve banks.

Schmid emphasized the potential economic consequences if the central bank’s operations were interrupted during government shutdowns, adding, "Because I think if that work is stopped, I think that would create a real shock to the system."

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