Former President and 2024 Republican candidate Donald Trump said the president should be able to exert more influence over U.S. policy during a news conference at his Florida resort Mar-a-Lago on Thursday. Fed More than they do today.
Toward the end of a press conference in which Trump agreed to debate Democratic rival Kamala Harris next month, Trump was asked about his views on the Fed and his outlook for the Fed if he is re-elected.
“The Fed is a very interesting thing, but it makes a lot of mistakes,” Trump said.[Chair Jerome Powell] It’s often a little late to do things. He came a little too early and a little too late. And, you know, it’s very much a gut feeling. I believe this is indeed a gut feeling. I had a fight with him. I had several arguments with him, which were very heated. I fought hard with him and we got along really well.
Trump nominated Powell to serve as chairman of the Federal Reserve in late 2017, and Powell took office in early 2018 after serving as a member of the Federal Reserve Board of Governors. Trump said he has a good relationship with Powell but said Thursday that his own business career would be helpful in shaping Fed policy.
“We get along very well. But I feel like the president should at least have a say there, yes,” Trump said. “I feel very strongly. I think, in my case, I make a lot of money, I’m very successful, and I think in a lot of situations I have better instincts than the people at the Fed or the chairman.
Traditionally, the president has had limited influence over Fed policy. Central bankers early on expressed the belief that central banks should avoid political influence as much as possible in order to focus solely on economic trends and data to drive decision-making.
While the board members, chairperson, and vice chairperson are appointed by the president and confirmed by the Senate, the governor’s full term is 14 years. This ensures that governors who have completed their terms will span multiple presidential administrations, thereby reducing the political pressure on any single president to make an appointment. Once a governor’s term expires, they are not eligible for reappointment.
The Chairman and Vice-Chairmen are elected for four-year terms. Powell’s term ends in May 2026, and the winner of this fall’s presidential election will nominate the next Fed chairman.
in a recent interview house lineprevious federal housing finance agency (FHFA) Director Mark Calabria said the former president’s claims — and the “quiet” moves his allies have taken to expand executive influence over the Fed — and some of the economics that come with it The warnings expressed by experts about this idea are exaggerated.
“The Fed operates within the government,” Calabria said last month. “The Fed coordinates with the government. The suggestion that Trump is somehow a threat to the Fed’s independence is grossly exaggerated, if not completely false. I have little sympathy for that assertion.
Calabria added that every government would act this way “to some extent,” but different governments would act in different ways.
Some economists disagree. Some point out that in the run-up to the 1972 presidential election, Richard Nixon aimed to influence the Federal Reserve by pressuring Chairman Arthur Burns to maintain an open monetary policy.
In a column published in 2004 national reviewColumnist, historian and former White House policy adviser Bruce Bartlett described the pressure campaign as “a classic case of the Fed subordinating good policy to politics.” Nixon used leverage to keep monetary policy loose despite rising inflation, leading to price controls and Burns’ “implicit” agreement to keep money flowing.
After the election, Bartlett recalls, price controls collapsed.
“Inflation jumped to 8.7 percent in 1973 and 12.3 percent in 1974,” he said. “Another recession began in November 1973 and did not end until March 1975. When the Watergate scandal broke, poor economic conditions created fertile ground for Nixon’s enemies. Had the economy been stronger, Nixon might have will survive, just as a strong economy undoubtedly helped Bill Clinton survive the Monica Lewinsky scandal.
Trump has frequently lashed out at Powell during his term, and Powell said at a 2019 congressional hearing that he would not comply if the president fired him.
Jared Bernstein, chairman of the White House Council of Economic Advisers under current President Joe Biden, reportedly criticized Trump’s remarks. hills.
“History could not be clearer. Ignoring this lesson can have long-lasting and damaging inflationary consequences. [of political influence over the Fed] Or reverse the hard-won progress of the past half century,” Bernstein shared in a post on the social media platform X Thursday.
