I find it odd that such a bank is given so much power.
The main reason is to avoid political interference. But it wasn't always this way. When the Fed was founded in 1913, the branches had more autonomy and the board was chaired by the Treasury secretary. It didn't work very well. Essentially the branches conducted their own monetary policy and were often influenced by local congressman. And with the Treasury secretary on the board, there were conflicts between monetary policy and fiscal policy. That all changed in 1935. The Board of Governors was given absolute power over the system, and the Treasury Secretary was removed from the board. That was the first time there was a coordinated national monetary policy. Since 1900, there has been a general trend in the world to both nationalize central banks and have them operate independently from the rest of the government. And one good reason is abuse by politicians. If you look up every episode of hyperinflation in modern times, it was because the government (usually a dictator) ordered the central bank to print money to pay for expenses.
If monetary policy is made public, then people can figure out how to game and possibly break the system.
It is supposed to independent of the government and politics, which is not always the case. I would have to search around, but I think research has shown that central bank independence is negatively correlated to inflation.
Because they lobbied and installed some of their own guys in Congress in the 1900's to get the Federal Reserve Act passed.
