Trump Suggests Presidential Influence on Interest Rates
On Thursday, Donald J. Trump expressed his belief that the president should have a role in determining interest rates, a statement that may reignite concerns about his potential influence on the politically independent Federal Reserve should he win the presidency again. “I feel that the president should at least have a say in there, yes, I feel that strongly,” Mr. Trump stated during a news conference at his Mar-a-Lago club in Palm Beach. He further asserted, “I think I have a better instinct than, in many cases, people that would be on the Federal Reserve, or the chairman.”
Throughout his presidency, Mr. Trump was vocal in his criticism of the Fed’s policies, often launching personal attacks against Jerome H. Powell, the chair of the Federal Reserve. Ironically, it was Mr. Trump who appointed Mr. Powell to his leadership role, a position that President Biden has subsequently reappointed him to. However, Mr. Powell’s decision to maintain higher interest rates than Mr. Trump preferred led to significant frustration, with the former president labeling him and his colleagues as “boneheads.” At one point, he even posed a provocative question on social media, asking who he considered a greater “enemy”: Mr. Powell or Xi Jinping, the president of China.
During his press conference, Mr. Trump did not shy away from acknowledging their tumultuous history, admitting, “I used to have it out with him.” He had previously contemplated the possibility of firing Mr. Powell while in office. However, the legality of dismissing or demoting a sitting Fed chair remains uncertain, and ultimately, Mr. Trump never pursued that course of action.
As speculation mounts about the Federal Reserve’s future should Mr. Trump reclaim the presidency, one significant consideration is that Mr. Powell’s term as chair extends until mid-2026. This raises questions about the direction and independence of the Fed under a potential second Trump administration.
