Ironically, the best way to insulate central banks from political pressure would be to expand their toolkit to allow for effective negative-interest-rate policy, though this will take time (as I also discuss in my book). In the meantime, the Fed and other central banks will have to keep walking a tightrope that leaves them especially vulnerable to outside pressure. Fortunately, the Fed has a chair right now who is able and willing to stand up to it.
Kenneth Rogoff, professor of economics and public policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003. The co-author of "This Time is Different: Eight Centuries of Financial Folly," his new book, "The Curse of Cash," was released in August 2016.