Republican Donald Trump’s collaborators are discreetly working on a series of proposals that They will seek to eliminate the independence of the Federal Reserve, the Central Bank of the United States, in case the tycoon manages to return to power in the elections next November.
Interest rates are one of the most important tools used by central banks to carry out their monetary policy. A rise in interest rates serves to curb inflation and protect the currency, which is why experts warn that a detailed study is required to establish a rate that benefits a country.
However, a report from The Wall Street Journal maintains that It analyzes whether it is the president himself who sets the interest rates or whether the FED decides it but with consultations and authorization from the Head of State. It is an unusual initiative that has no precedent in modern American history.
“Former Trump administration officials and other supporters of the presumptive Republican nominee have in recent months discussed a range of proposals, from incremental policy changes to an unlikely claim that the president himself should play a role in setting interest rates.” “, revealed the newspaper,
The newspaper maintains that this development occurs in the midst of a deepening division among the magnate’s advisors over to what level the authority of the Central Bank should be challenged.
Trump has often said he prefers low interest rates and expressed frustration at not being able to influence them as president. According to the newspaper, the New York magnate has had informal conversations with advisors about possible candidates to head the Central Bank and has asked some people if they would be interested in the position.
“Trump has repeatedly complained, publicly and privately, about Powell, continuing a years-long campaign to discredit the man he himself chose to lead the Federal Reserve,” The Wall Street Journal highlights.
The Federal Reserve is in the United States a complex system that unites a public sector with a private sector for control, among other chapters, the cost of money and inflation as its best-known aspect.
The main objectives of the Federal Reserve are price stability, control of inflation, and moderation of interest rates in the long term.
Therefore, Like the European Central Bank, the Federal Reserve is responsible for ensuring monetary stability in the United States, as well as price stability and moderation of interest rates in the long term.
The Board of Governors of the Federal Reserve System, based in Washington, is the public part. The private wing is supported by the 12 banks that make up the Reserve throughout the country.
It is an independent structure, protected by law, whose decision-making system is differentiated from the White House and the legislature. No official can operate in the FED. He also does not receive money from Congress. The head is appointed by the president, and from that moment on he is absolutely autonomous. It has operated this way since its creation in 1913.
However, the option is also being raised that the candidates to lead the Fed privately agree to consult informally with Trump.
It is worth mentioning that former President Donald Trump was emphatic when mentioning that if he is elected for a second term, he will not reappoint Jerome Powell as chairman of the Federal Reserve. Trump was openly dissatisfied with the performance of the current head of the Federal Reserve and suggested that Powell will apply rate cuts to try to give Democrats an advantage in the 2024 elections.
Trump’s criticism comes amid concerns about inflation and the Federal Reserve’s management of monetary policy. The former president believes that Powell’s approach has been too “political” and has not benefited the US economy.
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