Low rates can also inflate financial markets. Investors, unable to generate strong returns in safe assets, such as short-term Treasury notes, will move into progressively higher-risk assets, where returns are higher, but so is the danger of steep losses.

Former president of the Federal Reserve Bank of Cleveland Loretta Mester says it's important that the Fed stays independent and that fiscal politics should not interfere with monetary policy makers and their decisions.

AP reporter Chris Rugaber explains the role of the Federal Reserve and why an independent Fed is important. (AP video: River Zhang)

An independent Federal Reserve in recent decades has increasingly served as an anchor for global markets, stepping in to steady the ship during the 2008-09 financial crisis, the Covid pandemic and other shocks of recent years.

The Fed is an outsourced creation of Congress whose officials are appointed by presidents and confirmed by Congress. Of course it’s political. It can only be political.

The economy and the markets are "under surveillance" as we cover the latest in finance, economics and investment.