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Some politicians distrust the Federal Reserve and the whole idea of discretionary monetary policy. They believe...

Some politicians distrust the Federal Reserve and the whole idea of discretionary monetary policy. They believe that as an unelected body, the Fed has too much power and too much freedom. please explain whether these politicians will favor a fixed or flexible exchange rate? Please explain how that will address their concerns about discretionary monetary policy.

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Such politicians will definitely favor a flexible exchange rate system. Under a flexible exchange rate system, the exchange rate is determined by the forces of demand and supply whereas, under the fixed exchange rate system the exchange rate is determined by the Fed. Since these politicians do not trust the Fed, it only make sense that they'll not accept an exchange rate determined by the same. Discretionary monetary policies are undertaken by the Fed to promote economic growth by trying to control inflation and unemployment. They will also not support discretionary monetary policies as they distrust the Federal Reserve.

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