Trump Seeks to Control the Fed, Reports WSJ
What Would Happen if Trump Regains Presidency?
On April 25th, the Wall Street Journal published an article discussing the potential future of the Federal Reserve under a renewed Trump presidency.
If Donald Trump were to reclaim the White House, the dynamics between the Fed and the administration would undergo a significant transformation.
Changes in Fed’s Autonomy
Instead of maintaining the current independence of the central bank, Trump would have a say in interest rate decisions and even the power to remove the Federal Reserve’s chairperson.
This could potentially lead to the premature exit of current Fed chair Jerome Powell before his term ends in 2026.
The Federal Reserve’s autonomy would also be further eroded through other means.
The Treasury Department could be utilized to oversee and balance the Fed’s bond purchasing activities.
Additionally, the central bank’s regulatory authority might be subject to review by the Office of Management and Budget.
The Rebuttal
Trump’s campaign staff responded decisively to the article, emphasizing that unless a message comes directly from President Trump or an authorized team member, no speculations regarding future presidential decisions should be deemed official.
During his previous presidency, Trump and Powell had a tumultuous relationship, especially regarding interest rate policies amid the COVID-19 pandemic.
Current Criticisms by Trump
Since leaving office, Trump has been vocal in criticizing the Fed’s approach to achieving its 2% inflation target.
He has accused Powell of using interest rate adjustments as political tools, suggesting that rate cuts might be timed strategically for electoral advantages.
In an interview with Fox News cited by Business Insider, Trump expressed his belief that the Fed was being politicized, hinting at potential motives behind interest rate adjustments.
Despite Trump’s allegations, Powell has refuted the claims, asserting that interest rate decisions are carefully evaluated based on the economic outlook.
