Hidden in Plain Sight: The Federal Reserve's Role in U.S. Foreign Policy

This Note considers the Federal Reserve Board's (FRB) role in foreign policy using a newly released data set: 1,865 pages of Federal Open Market Committee meeting transcripts from 2008. These transcripts provide a window into the important decisions made by the FRB during the recent financial crisis. This Note argues that these decisions had substantial bearing on U.S. foreign policy: (i) extending $850 billion of international swap lines to certain nations and not others and (ii) jointly coordinating global interest rate cuts with six foreign central banks. As global markets grow more interconnected and the use of sanctions and other economic levers increase, the FRB's role in U.S. foreign policy will only become more salient. Consequently, the FRB should voluntarily issue guidelines to clarify when and how it will engage with the political branches on international matters. Voluntary guidelines strike the appropriate balance between institutionalizing coordination norms and protecting central bank independence. To date, legal scholars have only explored the FRB from an administrative law perspective. This Note moves beyond this domestic-centric focus and situates the FRB among principals and agents in U.S. foreign policy, raising new questions about central bank independence beyond the water's edge.