Economic Policy Experts: Doom, Thy Name Is Populism
Americans are choosing between an absurd tax framework and chaotic efforts to tamper with monetary policy.
Donald Trump recently told reporters that, as president, he would seek control over the monetary policy decisions currently under the jurisdiction of the Federal Reserve. While no details have been provided, Trump added, “I feel the president should have at least [a] say in there. … I think I have a better instinct than, in many cases, people that would be on the Federal Reserve or the chairman.” Previous comments by the former president suggest he has strong disagreements with Federal Reserve Chairman Jerome Powell (who Trump himself reappointed in 2018) and a desire for lower interest rates.
When it comes to Trump, it’s often unclear whether he should be taken seriously or treated as if he is just blowing off steam. However, Trump allies (unaffiliated with the campaign) have drafted plans to transfer monetary policy authority to the White House. Thankfully, current law gives the president little authority to seize the monetary policy controls. The Fed’s board of governors consists of seven members appointed by the president for staggered 14-year terms, leaving Trump without the authority to replace the full group in one term. Nor can Trump replace the presidents of the regional Fed banks, who also rotate onto the rate-setting Federal Open Market Committee. Powell’s term as chairman ends in May 2026, at which point Trump can appoint a new chairperson subject to Senate confirmation. Any structural reforms to the Fed would require an extremely unlikely act of Congress.
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Brian M. Riedl is a senior fellow at the Manhattan Institute. Follow him on Twitter here.
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