Thursday, former President Donald Trump said that the Federal Reserve has “gotten it wrong a lot” and that the people should have more say in how the bank makes decisions.
Trump, the Republican candidate for president, held a news conference from his home in Florida called Mar-a-Lago. He talked about his business experience and said that he has “better instinct than, in many cases, people that would be on the Federal Reserve or the chairman,” Jerome Powell.
Trump said, “I think the president should at least have a say in that.”
During his time as president, Trump often said bad things about Powell, who he chose to lead the Fed.
Trump wants to have more say in how the Fed makes decisions, which goes against the idea that the central bank should be separate from politics. When asked on July 31 if he would be willing to stay out of politics and cut interest rates in September, Powell said, in part, “We don’t change anything in our approach to deal with other factors like the political calendar.” We think Congress told us to do business without politics all the time, not just sometimes.
A Wall Street Journal article from last spring talked about how Trump’s supporters were working on plans to weaken the Federal Reserve’s independence if he were to win another term. Economists and other analysts didn’t like the ideas in the story, and in a speech soon after the piece came out, Treasury Secretary Janet Yellen made the case for the Fed’s independence.
It looks like there will be a rate cut in September after Powell’s news conference on July 31 after the last Fed meeting. Early this week, Wall Street was thinking about the chance of a short-term rate cut before the Fed’s policy meeting on September 17th and 18th, according to Joy Wiltermuth of MarketWatch. At least one analyst said that the jobless claims statistics released Thursday made such a big change unlikely.
