Some supporters of former President Donald Trump are pushing for the Federal Reserve Board to be more answerable to the president, hoping that if Trump is elected in November he can influence the Fed’s policies, according to The Wall Street Journal (WSJ).
Some suggestions reportedly include the Fed consulting the president on interest rate changes, making Fed regulations subject to a review from the White House, and having the Fed monitored by the Treasury Department, a part of the executive branch. Although Fed chairman Jerome Powell’s term expires in 2026, the group would allegedly like Trump to have the capacity to oust Powell before then if he sees fit, leaving Powell as a member of the board of governors but no longer the Fed chairman. All governors of the Fed have a 14-year term.
The WSJ noted that it’s unclear whether Trump is aware of or endorses the proposals.
“Let us be very specific here: unless a message is coming directly from President Trump or an authorized member of his campaign team, no aspect of future presidential staffing or policy announcements should be deemed official,” Trump senior advisers Susie Wiles and Chris LaCivita stated, according to the WSJ.
“Interest-rate policy is decided by the Federal Open Market Committee, which includes seven members of the Washington-based board of governors, who are appointed by the president and confirmed by the Senate, and 12 presidents of regional Fed banks, who are appointed by those banks’ private boards,” the Journal noted.
Last year, in the wake of inflation reaching the highest level in 40 years, the Fed raised interest rates to the highest level since 2001; they have stayed there ever since.
Trump, who appointed Powell as Fed chairman, has been harshly critical of him in recent years. Although it is unclear whether a president can fire the Fed chairman, in 2018, a report said Trump, frustrated with the Fed raising interest rates and watching the Dow Jones Industrial Average plunging in the worst week it had had in 10 years, had discussed the idea of firing Powell.
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In February, Trump told Fox News Business Network’s Maria Bartiromo, “I think he’s going to do something to probably help the Democrats, I think, if he lowers interest rates. … It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected, I don’t know.”
Asked if he would reappoint Powell, Trump answered, “No, I wouldn’t do that.”
