Former U.S.
President Donald Trump has expressed his desire to have a say in how the Federal Reserve operates if reelected.
Trump, who is the Republican candidate for the 2024 U.S.
elections scheduled for November 5th, made these remarks during a press conference on Thursday.
The Federal Reserve is an independent entity that oversees the monetary policy of the United States.
Among its responsibilities, the Fed controls the liquidity and value of the U.S.
dollar and has the authority to adjust interest rates to influence inflation.
The Federal Reserve’s independence, although not constitutionally guaranteed, is crucial for separating politics from the nation’s economic well-being.
The Fed’s chairperson, appointed by the U.S.
President and confirmed by the Senate, serves a 4-year term that can be extended.
The chair leads a board of seven governors, each nominated by the U.S.
President for a 14-year term.
Jerome Powell, the current Fed Chair, was nominated by Trump in 2018, and his term was extended by Joe Biden in 2022, lasting until 2026.
The Fed, under Powell’s leadership, has raised interest rates significantly to combat the highest inflation in 40 years, reaching 5.25% in July 2023, the highest in 23 years, and maintaining this level since then.
Market expectations suggest that the Federal Reserve might start cutting interest rates in September, potentially impacting the Democratic campaign positively by signaling a win against inflation.
However, Trump has urged the Fed to delay rate cuts until after the elections, a move viewed as questionable by economists due to its potential economic repercussions.
In response to the Fed’s likely deviation from his preferences, Trump is pushing for increased presidential control over the institution, even threatening to remove Powell from his position if deemed necessary.
Such a move, unprecedented and legally untested, could create turmoil in the markets, particularly if perceived as a politically driven decision.
Source: Money.it international edition, published on 2024-08-09 19:34:10.
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