A revelatory history of how the Federal Reserve finances American power.

Central banks, we are told, are economic superpowers that must remain independent of modern democratic governments. The US Federal Reserve’s presumed insulation from politics affords it the autonomy and credibility to control inflation and the national economy’s stability—or so the story goes.

In The Fiscal Fed, Will Bateman offers a deeply sourced, empirical history that reveals one of the Fed’s core functions is, and has always been, fiscal—that is, sustaining the market for Treasury borrowing to support geopolitical and nation-building policies by filling gaps in federal spending and revenues from taxation. Bateman combs Fed meeting transcripts, staff notes, financial accounts, and legal documents, to trace loans and public-debt purchases since the central bank’s founding. The result is a milestone work that reveals how, for most of the Fed’s history, its transactions were aimed at government financing—either by providing cheap credit to close budget gaps or by manipulating yields on government debt. The Fed’s support for government finance is a feature, not a bug, of American economic institutions.