History always repeats itself in astonishing ways. It reminds me of a power struggle within the Federal Reserve during World War II.

From 1933 to 1941, the economic collapse caused by the Great Depression kept interest rates low. The turning point came—after the U.S. entered the war in 1942, the government needed to finance the war at minimal cost. The Federal Reserve and the Treasury signed an agreement to keep government bond yields below 2.5%.

After World War II ended, problems arose. Truman wanted the Fed to continue maintaining wartime easing policies to facilitate low-cost borrowing for the government. But the Fed Chairman, Eccles, disagreed—he believed that since the war was over, printing money wildly would only trigger hyperinflation.

He began directly challenging the White House. This angered Truman. In 1948, Eccles’s term as Chairman ended, and the President did not renominate him—instead, he chose a seemingly more "obedient" Thomas McCarty.

An interesting twist: Eccles was removed from the chairmanship but did not resign quietly. He used his remaining term as a Federal Reserve Board member to stay in the institution. His reason was straightforward—protect the independence of the Federal Reserve from the Treasury.

Since then, the Fed found itself in an awkward situation: the new Chairman, McCarty, took over, but the highly respected former Chairman Eccles still sat on the Board.

The turning point was the Korean War. When the war broke out in 1950, inflation soared. Truman again pressured the Fed to keep interest rates low. In January 1951, after meeting with top Fed officials, the White House announced that the Fed had agreed to cooperate. This was a complete lie. Eccles directly leaked the true record of the meeting to The New York Times and The Washington Post, publicly calling out the President.

Under immense public opinion and market pressure, the White House was forced to back down. In March 1951, the famous "Fed-Treasury Accord" was born. This agreement completely severed the Treasury’s control over the Fed, granting the Federal Reserve true independence in setting monetary policy for decades to come.