Question

Why should the Federal Reserve stay independent from any political influence and vice versa?

Answer 1

Because federal reserve is responsible for conducting the monetary policy in the United States of America. If it is influenced by any political propaganda or motive it will not be able to serve its purpose of ensuring full employment and maintaining price stability. This is generally because political business cycle tends to use recession and expansion as a medium of gaining political advantage. To keep the economy unexposed and less vulnerable to political business cycle there should be and independence in the federal reserve system.