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Farrell: Fed May Get Too Close To White House

There is a sentence in the new financial regulatory proposal thathas me out of my seat. It says, "We also propose that the Federal Reserve Board receive prior written approval from the Secretary of the Treasury for emergency lending under its 'unusual and exigent circumstances' authority."

The Secretary of the Treasury is an appointed position and the Fed has been an independent agency free from the politics of the Oval Office. To me, this is a step towards the politicization of the Fed and is upsetting and dangerous. The recent ability of the Fed to act and act quickly arguably saved the system. Throwing the emergency ability to act into the political arena is not a good idea.

I'm not one for conspiracy theories, but I think I need to brush off the paranoid part of my personality. This could be a step towards moving the Fed ever closer to the White House.

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