Donald Trump

Jerome Powell

JD Vance

Donald Trump just can’t stop talking about the Federal Reserve. The guy has been telling us he thinks the president should have a bigger say in how the Fed operates, especially when it comes to interest rates.&nbsp; 
At a recent press conference at his Mar-a-Lago estate, the Republican nominee reiterated his belief that the Fed has “gotten it wrong a lot.”&nbsp; 
And in typical Trump fashion, he argued that his instincts—shaped by years of making money in business—are better than those of the people currently running the Fed. 
But Trump’s not the only one who thinks this way. His running mate, Senator JD Vance of Ohio, is right there with him. In a recent interview, Vance said that interest rate decisions “should fundamentally be a political decision.”&nbsp; 
<figure id="attachment_558960" aria-describedby="caption-attachment-558960" style="width: 100%" class="wp-caption alignnone">
 <img decoding="async" class="wp-image-558960 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/07/What-will-a-Kamala-Harris-win-mean-for-Americas-economy.jpeg" alt="Why does Donald Trump insist on controlling the Federal Reserve?" width="1000" height="666" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/07/What-will-a-Kamala-Harris-win-mean-for-Americas-economy.jpeg 1000w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/What-will-a-Kamala-Harris-win-mean-for-Americas-economy-300x200.jpeg 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/What-will-a-Kamala-Harris-win-mean-for-Americas-economy-768x511.jpeg 768w" sizes="(max-width: 1000px) 100vw, 1000px">
 <figcaption id="caption-attachment-558960" class="wp-caption-text">
 Vice President Kamala Harris
 </figcaption>
</figure> 
Of course, the Democratic nominee Kamala Harris wasn’t having any of that. She fired back during a stop in Arizona, saying:&nbsp; 
<blockquote>
 “The Fed is an independent entity, and as president, I would never interfere in the decisions that the Fed makes.”
</blockquote> 
<h3 id="b-trump-vs-the-fed-a-power-struggle-brewing-b">Trump vs. the Fed: A power struggle brewing</h3> 
Here’s the deal: the Fed has always been separate from the White House. The president doesn’t get to decide interest rates—that’s the Fed’s job. This setup was designed to keep things like monetary policy free from political BS.&nbsp; 
The Federal Reserve Act basically says the Fed needs to focus on keeping people employed, keeping prices stable, and making sure interest rates aren’t crazy. But Trump, being Trump, doesn’t love that arrangement. 
<img loading="lazy" decoding="async" class="alignnone wp-image-566613 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed.webp" alt="Why does Donald Trump insist on controlling the Federal Reserve?" width="1920" height="1280" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed.webp 1920w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed-300x200.webp 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed-1200x800.webp 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed-768x512.webp 768w, https://www.cryptopolitan.com/wp-content/uploads/2024/08/Economists-expect-only-a-quarter-point-rate-cut-from-the-Fed-1536x1024.webp 1536w" sizes="(max-width: 1920px) 100vw, 1920px"> 
Just last month, Trump said that if he’s elected again, he’ll “bring interest rates way down.” He thinks inflation and high interest rates are “destroying our country.”&nbsp; 
“I bring inflation way down,” he promised, “so people can buy bacon again, so people can buy a ham sandwich again, so that people can go to a restaurant and afford it.” Classic Trump, right? Bold promises with a side of populism. 
<h3 id="b-inflation-interest-rates-and-trump-s-never-ending-battle-b">Inflation, interest rates, and Trump’s never-ending battle</h3> 
Inflation’s been a pain in the ass ever since COVID-19 hit. Prices shot up like crazy, reaching levels we haven’t seen in over 40 years. The Fed tried to cool things down by hiking interest rates 11 times between March 2022 and July 2023.&nbsp; 
The federal funds rate now sits between 5.25% and 5.50%. The idea was to slow the economy enough to get inflation under control. 
But now, things are starting to settle. Inflation is creeping back down, closer to the Fed’s target of 2%.&nbsp; 
In June, the personal consumption expenditures price index—basically the Fed’s favorite inflation gauge—showed a 2.5% rise year over year.&nbsp; 
With inflation cooling, the Fed might finally start thinking about lowering its benchmark rate for the first time in ages. 
Of course, Trump’s been yelling about lower rates for years. Remember, he nominated Jerome Powell to lead the Fed back in 2018, but that didn’t stop him from publicly trashing Powell and the Fed’s decisions.&nbsp; 
Trump slammed the Fed for keeping interest rates too high, arguing that it made it harder for businesses and regular folks to borrow money.&nbsp; 
<figure id="attachment_554359" aria-describedby="caption-attachment-554359" style="width: 100%" class="wp-caption alignnone">
 <img loading="lazy" decoding="async" class="wp-image-554359 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/07/Bitcoins-connection-to-stock-markets-is-about-to-revive-1.jpg" alt="Why does Donald Trump insist on controlling the Federal Reserve?" width="1200" height="800" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/07/Bitcoins-connection-to-stock-markets-is-about-to-revive-1.jpg 1200w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/Bitcoins-connection-to-stock-markets-is-about-to-revive-1-300x200.jpg 300w, https://www.cryptopolitan.com/wp-content/uploads/2024/07/Bitcoins-connection-to-stock-markets-is-about-to-revive-1-768x512.jpg 768w" sizes="(max-width: 1200px) 100vw, 1200px">
 <figcaption id="caption-attachment-554359" class="wp-caption-text">
 Jerome Powell giving his testimony to the Senate
 </figcaption>
</figure> 
He also claimed it put the U.S. at an economic disadvantage compared to countries with lower rates. But, despite all his noise, the Fed didn’t budge. 
Now, Trump’s got a new gripe: the timing of potential rate cuts. He’s been warning the Fed not to lower rates right before the upcoming presidential election.&nbsp; 
Last week, he said that cutting rates in September, just weeks before the election, is “something that [central bank officials] know they shouldn’t be doing.” 
And Trump still doesn’t trust Powell. Earlier this year, he said he wouldn’t reappoint Powell as Fed chair if he had the chance.

Why does Donald Trump insist on controlling the Federal Reserve?

Table of Contents

Cryptopolitan_News

Other articles published on Aug 13, 2024

NFT Company Pudgy Penguins Confirms Attendance At Coinfest Asia 2024 In Bali, Indonesia

Ethereum Sees Surge in On-Chain Activity as Institutional Investment Soars

Elon Musk Shut Down Massive X Cyber Attack Ahead of Record-Shattering Trump Interview

Metaplanet Expands Bitcoin Holdings With Additional 57.1 BTC Purchase

Investors flock to ETH products over BTC as markets recover — CoinShares

New Solana Memecoin Jesus Pepe (PEPEJES) Will Surge Over 15,000% Before Exchange Listing, While S...

Join our free newsletter for daily crypto updates!