Global interest rates, does Trump have the final say? According to The Wall Street Journal, allies of former US President Trump are planning a project that would give the President unprecedented influence over the Federal Reserve. Although Trump’s senior advisor team emphasizes that this should not be seen as Trump’s official stance, there seems to be evidence to support the claims.
According to the report, the allies are proposing a plan that would make the President a “proxy” member of the central bank’s board, granting him the power to provide input on interest rate decisions. The proposal also suggests that the Treasury Department should serve as an additional oversight body to regulate the Federal Reserve’s bond-buying activities.
Furthermore, the proposal includes a draft that empowers the President to remove the current Fed Chair, Jerome Powell. It also requires the Fed’s policies to align with the government’s objectives. If this proposal is indeed formulated by the Trump team and Trump is elected as President in November, he would intervene in the traditionally independent Federal Reserve like never before.
In fact, during his previous term as President in 2018, Trump expressed his dissatisfaction with the Fed’s interest rate hikes and openly criticized Powell and other central bank presidents. He even considered dismissing Powell from his position. At that time, he strongly criticized Powell for “loving rate hikes” and “severely impacting the US economy.” His public remarks seemed to indicate regret for nominating Powell in the first place.
In a recent interview with Fox Business, Trump continued to criticize Powell, suggesting that he might announce interest rate cuts to help the Democratic Party win the upcoming presidential election.
Regarding the secret plan, Trump’s senior advisors emphasize that any announcements regarding future presidential personnel or policies should not be considered official unless they come directly from Trump or authorized members of his campaign team.
There are still questions about whether the President has enough power to implement such bold measures on an institution like the Federal Reserve, which traditionally strives to maintain political neutrality. As of the time of writing, the Federal Reserve spokesperson has declined to comment on this report.