New Delhi, Aug. 4 -- The very public friction between US President Donald Trump and Federal Reserve Chair Jerome Powell has once again thrust central bank independence into the spotlight. The underlying question is both simple and consequential: should elected leaders have a say in how central banks set interest rates?

This tension isn't new. Trump repeatedly criticised the Fed's rate hikes during his earlier term. European leaders were unsettled by the European Central Bank's aggressive tightening in 2022. And back in 2018, India witnessed its own showdown between the Reserve Bank of India (RBI) and the finance ministry. Still, the consensus among economists is clear: independent central banks are critical to maintaining macroeconomic s...